SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
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AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 27, 2001
VECTREN CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
INDIANA
(State or Other Jurisdiction of Incorporation)
1-15467 35-2086905
------- ----------
(Commission File Number) (IRS Employer Identification No.)
20 N.W. Fourth Street
Evansville, Indiana 47741
(Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, Including Area Code: (812) 491-4000
Item 7. Financial Statements and Exhibits.
On October 31, 2000, Vectren Corporation, the public utility holding company of
Indiana Gas Company, Inc. (the company), completed the acquisition of the
natural gas distribution assets from The Dayton Power and Light Company, a
wholly owned subsidiary of DPL, Inc. The business will operate under the name
Vectren Energy Delivery of Ohio, Inc. (VEDO). Under the acquisition structure,
the company holds a 47 percent undivided ownership interest and VEDO has a 53
percent undivided ownership interest. This Form 8-K/A amends the Current Report
on Form 8-K filed by Vectren Corporation on January 16, 2001 to provide
additional information on the calculation of pro forma interest expense in
Note 3b and the pro forma balance sheet in the introduction.
The following financial statements is included:
Pro forma financial statements of Vectren Corporation for the year ended
December 31, 1999 and as of September 30, 2000 and for the nine months ended
September 30, 2000.
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 hereunto duly authorized.
VECTREN CORPORATION
(Registrant)
Dated: August 27, 2001 By: /s/ M. Susan Hardwick
-------------------------
M. Susan Hardwick
Vice President and Controller
Vectren Corporation And Subsidiary Companies
Index
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Unaudited Pro Forma Combined Financial Statements Page
Introduction 1
Unaudited Pro Forma Combined Balance Sheet
as of September 30, 2000 2
Unaudited Pro Forma Combined Statement of
Income for the Year Ended December 31, 1999 3
Unaudited Pro Forma Combined Statement of Income
for the Nine Months Ended September 30, 2000 4
Notes to Pro Forma Financial Statements 5
1
Vectren Corporation and Subsidiary Companies
Pro Forma Financial Information
The accompanying financial statements present the unaudited pro forma balance
sheet as of September 30, 2000 and the unaudited pro forma statement of income
for the nine months ended September 30, 2000 and for the year ended December
31,1999.
On October 31, 2000, Vectren Corporation (Vectren) completed its acquisition of
the natural gas distribution assets of The Dayton Power and Light Company
(Acquisition) for approximately $465 million pursuant to an Asset Purchase
Agreement dated December 14, 1999. Vectren acquired the gas utility assets as a
tenancy in common through two separate wholly-owned subsidiaries. Operations
will be conducted under the name Vectren Energy Delivery of Ohio (VEDO). Under
the acquisition structure, Indiana Gas Company, Inc., one of Vectren's operating
public utilities, holds a 47 percent undivided ownership interest and VEDO has a
53 percent undivided ownership interest.
The unaudited pro forma balance sheet as of September 30, 2000 reflects the
combination of the September 30, 2000 balance sheet of Vectren Corporation and
the October 31, 2000 balance sheet of the Dayton Power & Light Company Natural
Gas Retail Distribution Business. The pro forma statement of income for the nine
month period ended September 30, 2000 and for the year ended December 31, 1999
are presented as if the Acquisition had occurred at January 1, 1999.
Preparation of the pro forma financial information was based on assumptions
deemed appropriate by management. The pro forma information is unaudited and is
not necessarily indicative of the results which actually would have occurred if
the transaction had been consummated at the beginning of the period presented,
nor does it purport to represent the future financial position and results of
operations for future periods. The pro forma information should be read in
conjunction with the audited consolidated financial statements of Vectren filed
on Form 8-K for the year ended December 31, 1999 and the unaudited financial
statements of Vectren filed on Form 10-Q for the quarter ended September 30,
2000.
2
VECTREN CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As Of September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Vectren Dayton Vectren
Historical Acquisition (2a) Pro Forma
---------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 19,009 $ (2,482) (2c) $ 16,527
Temporary investments 826 - 826
Accounts receivable, net 134,821 11,634 146,455
Accrued unbilled revenues 21,058 - 21,058
Inventories 47,897 54,199 102,096
Prepaid gas delivery service 46,788 - 46,788
Recoverable fuel and natural gas costs 30,680 8,156 38,836
Prepayments and other current assets 31,376 13,621 44,997
---------- -------- ---------
Total current assets 332,455 85,128 417,583
---------- -------- ---------
Utility Plant:
Original cost 2,419,568 334,804 2,754,372
Less: accumulated depreciation
and amortization 1,069,471 145,939 1,215,410
---------- -------- ---------
Net utility plant 1,350,097 188,865 1,538,962
---------- -------- ---------
Other Investments:
Investments in leveraged leases 91,253 - 91,253
Investments in partnerships and other
corporations 80,873 - 80,873
Notes receivable 62,384 - 62,384
Other 2,008 - 2,008
---------- ------- ---------
Total other investments 236,518 - 236,518
---------- ------- ---------
Nonutility property, net of accumulated
depreciation 89,530 1,605 91,135
Other Assets:
Goodwill - 199,600 (2b) 199,600
Deferred charges 20,578 (3,336)(2c) 17,242
Unamortized debt costs 14,970 - 14,970
Demand side management programs 25,686 - 25,686
Other 3,134 - 3,134
-------- -------- ---------
Total other assets 64,368 196,264 260,632
---------- -------- ---------
TOTAL ASSETS $2,072,968 $471,862 $2,544,830
========== ======== =========
The accompanying notes are an integral part of these pro forma combined
financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As Of September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Vectren Dayton Vectren
Historical Acquisition(2a) Pro Forma
---------- ----------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of adjustable rate $ 53,700 $ - $ 53,700
bonds subject to tender
Current maturities of long-term debt
and other obligations 258 - 258
Short-term borrowings 310,545 463,981 (2d) 774,526
Accounts payable 99,964 - 99,964
Refunds to customers and customer deposits 13,556 7,881 21,437
Accrued taxes 14,344 - 14,344
Accrued interest 12,617 - 12,617
Accrued purchase gas 15,076 - 15,076
Other current liabilities 50,506 - 50,506
-------- -------- --------
Total current liabilities 570,566 471,862 1,042,428
-------- -------- --------
Deferred Credits and Other Liabilities:
Deferred income taxes 203,219 - 203,219
Accrued postretirement benefits other
than pensions 44,675 - 44,675
Unamortized investment tax credits 23,756 - 23,756
Other 18,111 - 18,111
-------- -------- --------
Total deferred credits and other liabilities 289,761 - 289,761
-------- -------- --------
Commitments and Contingencies
Minority interest in subsidiary 1,900 - 1,900
Capitalization:
Long-term debt and other obligations,
net of current maturities 484,074 - 484,074
Preferred stock of subsidiary:
Redeemable 8,076 - 8,076
Nonredeemable 8,889 - 8,889
-------- -------- --------
Total preferred stock 16,965 - 16,965
-------- -------- --------
Common stock (no par value) - issued and
outstanding 61,219 213,742 - 213,742
Retained earnings 495,886 - 495,886
Accumulated other comprehensive income 74 - 74
-------- -------- --------
Total common shareholders' equity 709,702 - 709,702
-------- -------- --------
Total capitalization 1,210,741 - 1,210,741
-------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $2,072,968 $ 471,862 $2,544,830
======== ======== =========
The accompanying notes are an integral part of these pro forma combined
financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For The Year Ended December 31, 1999
(In Thousands)
Pro forma Adjustments
-----------------------
Vectren Dayton Acquisition Vectren
Historical Historical Adjustments Pro forma
----------- ---------- ------------ ---------
OPERATING REVENUES:
Gas utility $ 499,573 $218,866 $ - $ 718,439
Electric utility 307,569 - - 307,569
Energy services and other 261,275 - - 261,275
--------- -------- ------- ---------
Total operating revenues 1,068,417 218,866 - 1,287,283
--------- -------- ------- ---------
OPERATING EXPENSES:
Cost of gas sold 266,429 131,302 - 397,731
Fuel for electric generation 66,305 - - 66,305
Purchased electric energy 20,791 - - 20,791
Cost of energy services and other 247,590 - - 247,590
Other operating 189,622 29,180 - 218,802
Depreciation and amortization 86,998 8,117 4,990 (3a) 100,105
Taxes other than income taxes 29,910 23,070 - 52,980
--------- -------- -------- --------
Total operating expenses 907,645 191,669 4,990 1,104,304
--------- -------- -------- ---------
OPERATING INCOME (LOSS) 160,772 27,197 (4,990) 182,979
OTHER INCOME:
Equity in earnings of unconsolidated
investments 11,642 - - 11,642
Other - net 8,902 - - 8,902
--------- -------- -------- ---------
Total other income 20,544 - - 20,544
--------- -------- -------- ---------
INTEREST EXPENSE 42,862 - 27,839 (3b) 70,701
--------- -------- -------- ---------
INCOME (LOSS) BEFORE PREFERRED
DIVIDENDS AND INCOME TAXES 138,454 27,197 (32,829) 132,822
PREFERRED DIVIDEND REQUIREMENT
OF SUBSIDIARY 1,078 - - 1,078
--------- -------- -------- ---------
INCOME (LOSS) BEFORE INCOME TAXES 137,376 27,197 (32,829) 131,744
INCOME TAXES (BENEFIT) 45,708 9,204 (11,490)(3c) 43,422
--------- -------- -------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST 91,668 17,993 (21,339) 88,322
MINORITY INTEREST IN SUBSIDIARY 920 - - 920
--------- -------- -------- ---------
NET INCOME (LOSS) $ 90,748 $ 17,993 $(21,339) $ 87,402
========= ======== ======== ========
AVERAGE COMMON SHARES OUTSTANDING 61,306 61,306 61,306 61,306
DILUTED COMMON SHARES OUTSTANDING 61,430 61,430 61,430 61,430
BASIC EARNINGS PER AVERAGE SHARE OF
COMMON STOCK $ 1.48 $ .29 $ (.35) $ 1.43
DILUTED EARNINGS PER SHARE OF
COMMON STOCK $ 1.48 $ .29 $ (.35) $ 1.42
The accompanying notes are an integral part of these pro forma combined
financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For Nine Months Ended September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Vectren Dayton Acquisition Vectren
Historical Historical Adjustments Pro forma
---------- ---------- ----------- ----------
OPERATING REVENUES:
Gas utility $ 391,486 $ 167,696 $ - $ 559,182
Electric utility 249,215 - - 249,215
Energy services and other 300,074 - - 300,074
---------- ---------- ---------- ----------
Total operating revenues 940,775 167,696 - 1,108,471
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 229,373 105,628 - 335,001
Fuel for electric generation 51,722 - - 51,722
Purchased electric energy 25,085 - - 25,085
Cost of energy services and other 285,856 - - 285,856
Other operating 142,620 17,058 - 159,678
Merger costs 31,306 - - 31,306
Depreciation and amortization 75,008 6,615 3,742(3a) 85,365
Taxes other than income taxes 22,170 15,408 - 37,578
--------- ---------- ---------- ----------
Total operating expenses 863,140 144,709 3,742 1,011,591
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) 77,635 22,987 (3,742) 96,880
OTHER INCOME:
Equity in earnings of unconsolidated
investments 16,950 - - 16,950
Other - net 14,497 - - 14,497
---------- ---------- ---------- ----------
Total other income 31,447 - - 31,447
---------- ---------- ---------- ----------
INTEREST EXPENSE 37,940 - 20,879(3b) 58,819
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE PREFERRED
DIVIDENDS AND INCOME TAXES 71,142 22,987 (24,621) 69,508
PREFERRED DIVIDEND REQUIREMENT
OF SUBSIDIARY 776 - - 776
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 70,366 22,987 (24,621) 68,732
INCOME TAXES (BENEFIT) 23,527 7,832 (8,617)(3c) 22,742
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE MINORITY
INTEREST 46,839 15,155 (16,004) 45,990
MINORITY INTEREST IN SUBSIDIARY 983 - - 983
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 45,856 $ 15,155 $ (16,004) $ 45,007
========== ========== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING 61,257 61,257 61,257 61,257
DILUTED COMMON SHARES OUTSTANDING 61,332 61,332 61,332 61,332
BASIC EARNINGS PER AVERAGE SHARE OF
COMMON STOCK $ .75 $ .25 $ (.26) $ .73
DILUTED EARNINGS PER SHARE OF COMMON
STOCK $ .75 $ .25 $ (.26) $ .73
The accompanying notes are an integral part of these pro forma combined
financial statements.
5
VECTREN CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
Vectren Corporation (Vectren) is a public utility holding company whose
wholly-owned subsidiary, Vectren Utility Holdings, Inc. (VUHI), is the holding
company of Vectren's two operating public utilities, Indiana Gas Company, Inc.
(Indiana Gas), and Southern Indiana Gas and Electric Company. On October 31,
2000, Vectren completed its acquisition of the natural gas distribution assets
of The Dayton Power and Light Company (Acquisition) for approximately $465
million pursuant to an Asset Purchase Agreement dated December 14, 1999. Vectren
acquired the gas utility as a tenancy in common through two separate
wholly-owned subsidiaries. Operations will be conducted under the name Vectren
Energy Delivery of Ohio (VEDO). Under the acquisition structure, Indiana Gas
holds a 47 percent undivided ownership interest and VEDO has a 53 percent
undivided ownership interest.
The accompanying combined pro forma financial statements give effect to the
Acquisition. The unaudited pro forma combined balance sheet as of September 30,
2000 is presented as if the Acquisition and the related debt financing had
occurred on September 30, 2000. The pro forma combined statement of income for
the nine month period ended September 30, 2000 and for the year ended December
31, 1999 are presented as if the Dayton Acquisition had occurred at January 1,
1999.
2. Pro Forma Adjustments to Balance Sheet
(a) Determination of total purchase price:
Cash purchase price $ 463,981
Liability assumed for customer deposits 7,881
Transaction costs 5,818
---------
Total purchase price $ 477,680
=========
(b) Allocation of purchase price:
Cash purchase price $ 463,981
Transaction costs 5,818
---------
469,799
=========
Tangible assets acquired 278,080
Liabilities assumed (7,881)
---------
Net assets acquired 270,199
---------
Excess allocated to goodwill $ 199,600
=========
The above reflects Management's preliminary purchase price allocation
based upon information currently available. The purchase price is
subject to adjustment based upon finalization of the closing balance
sheet in accordance with the Asset Purchase Agreement. Management
believes that any such adjustment will not be material.
(c) Pro forma adjustment to reclassify deferred transaction costs incurred
as of September 30, 2000 of $3,336 to goodwill and to reflect the cash
payment at closing of $2,482 for the remaining transaction costs.
(d) A $435 million commercial paper program established by VUHI provided
$434,360 of the initial Acquisition financing. Additionally, Indiana
Gas provided $29,621 from its commercial paper program for total
financing of $463,981. On December 28, 2000, VUHI issued a $150 million
Floating Rate Note due December 27, 2001, replacing an equal amount of
commercial paper. Management anticipates that the short-term financings
will be replaced over time with permanent, long-term financing.
Short- term Annualized
borrowings Interest
----------- ----------
Commercial paper (VUHI) $284,360 $ 16,189
6.6425% Floating rate note (VUHI) 150,000 9,964
Commercial paper (Indiana Gas) 29,621 1,686
-------- --------
$463,981 $ 27,839
======== ========
3. Pro Forma Adjustments to Income Statements
(a) Pro forma adjustment to reflect the amortization of goodwill of
$199,600 amortized over a period of 40 years.
(b) Pro forma adjustment to reflect the interest expense from the
Acquisition financing based upon borrowings of $463,981 at an average
interest rate of approximately 6.0 percent annum based upon Indiana
Gas' and VUHI's composite average short-term borrowing rate at the date
of the Acquisition (see 2d).
(c) Pro forma adjustment to reflect the income tax benefit on a combined
federal and state statutory rate of 35 percent.
(d) Vectren and Dayton Power and Light Company (DP&L) entered into an
agreement whereby DP& L will provide transitional support to Vectren in
the areas of meter reading, billing, cash receipts, collections,
customer deposits, telecommunication services and other miscellaneous
services for a predetermined fee. Because these fees will be no greater
than the historical costs incurred by DP&L for such support services
for its natural gas distribution operations, no pro forma adjustment
has been reflected.