UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission Registrant, State of Incorporation, I.R.S.
Employer
File Number Address, and Telephone Number
Identification No.
1-11377 CINERGY CORP. 31-1385023
(A Delaware Corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
(513) 381-2000
1-1232 THE CINCINNATI GAS & ELECTRIC COMPANY 31-0240030
(An Ohio Corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
(513) 381-2000
1-3543 PSI ENERGY, INC. 35-0594457
(An Indiana Corporation)
1000 East Main Street
Plainfield, Indiana 46168
(317) 839-9611
2-7793 THE UNION LIGHT, HEAT AND POWER COMPANY 31-0473080
(A Kentucky Corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
(513) 381-2000
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
This combined Form 10-Q is separately filed by Cinergy Corp., The Cincinnati
Gas & Electric Company, PSI Energy, Inc., and The Union Light, Heat and Power
Company. Information contained herein relating to any individual registrant
is filed by such registrant on its own behalf. Each registrant makes no
representation as to information relating to the other registrants.
The Union Light, Heat and Power Company meets the conditions set forth in
General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing its
company specific information with the reduced disclosure format.
As of April 30, 1996, shares of Common Stock outstanding for each company were
as listed:
Company Shares
Cinergy Corp., par value $.01 per share 157,679,129
The Cincinnati Gas & Electric Company, par value $8.50 per share 89,663,086
PSI Energy, Inc., without par value, stated value $.01 per share 53,913,701
The Union Light, Heat and Power Company, par value $15.00 per share 585,333
<PAGE>
TABLE OF CONTENTS
Item Page
Number Number
Glossary of Terms . . . . . . . . . . . . . . . . . . . 3
PART I. FINANCIAL INFORMATION
1 Financial Statements
Cinergy Corp.
Consolidated Balance Sheets . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . .
Consolidated Statements of Changes in Common
Stock Equity. . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . .
The Cincinnati Gas & Electric Company
Consolidated Balance Sheets . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . .
PSI Energy, Inc.
Consolidated Balance Sheets . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . .
The Union Light, Heat and Power Company
Balance Sheets. . . . . . . . . . . . . . . . . . . .
Statements of Income. . . . . . . . . . . . . . . . .
Statements of Cash Flows. . . . . . . . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . .
Notes to Financial Statements . . . . . . . . . . . . .
2 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . .
PART II. OTHER INFORMATION
1 Legal Proceedings . . . . . . . . . . . . . . . . . . .
4 Submission of Matters to a Vote of Security Holders . .
5 Other Information . . . . . . . . . . . . . . . . . . .
6 Exhibits and Reports on Form 8-K. . . . . . . . . . . .
Signatures. . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
GLOSSARY OF TERMS
The following abbreviations or acronyms used in the text of this combined Form
10-Q are defined below:
TERM DEFINITION
1995 Form Combined 1995 Annual Report on Form 10-K filed by Cinergy as
10-K amended, CG&E, PSI, and ULH&P
AFUDC Allowance for funds used during construction
Avon Energy Avon Energy Partners PLC, a Limited Liability Company and a
subsidiary of Avon Holdings
Avon Holdings Avon Energy Partners Holdings, a joint venture between
Cinergy and GPU, organized in the United Kingdom as an
Unlimited Liability Company
CG&E The Cincinnati Gas & Electric Company (a subsidiary of
Cinergy)
Cinergy or Cinergy Corp.
Company
Clean Coal A joint arrangement by PSI and Destec Energy, Inc. for a
Project 262-mw clean coal power generating facility located at
Wabash River Generating Station, which was placed in
service in November 1995
CWIP Construction work in progress
DSM Demand-side management
FASB Financial Accounting Standards Board
February 1995 An IURC order issued in February 1995
Order
FERC Federal Energy Regulatory Commission
GPU General Public Utilities Corporation
IBEW International Brotherhood of Electrical Workers
Investments Cinergy Investments, Inc. (a subsidiary of Cinergy)
IURC Indiana Utility Regulatory Commission
kwh Kilowatt-hour
May 1992 Order A PUCO order issued in May 1992
Mcf Thousand cubic feet
M.E. Holdings M.E. Holdings, Inc. (a subsidiary of Investments)
Mega-NOPR FERC's Notice of Proposed Rulemaking Promoting Wholesale
Competition Through Open Access Non-discriminatory
Transmission Services by Public Utilities
Merger Costs Merger transaction costs and costs to achieve merger savings
<PAGE>
GLOSSARY OF TERMS (Continued)
TERM DEFINITION
Midlands Midlands Electricity plc
Money Pool Participants with surplus short-term funds, whether from
internal or external sources, provide short-term loans to
other system companies at rates that approximate the costs
of the funds in the money pool
Moody's Moody's Investors Service
mw Megawatt
NOPR FERC's Notice of Proposed Rulemaking
PSI PSI Energy, Inc. (a subsidiary of Cinergy)
PUCO Public Utilities Commission of Ohio
PUHCA Public Utility Holding Company Act of 1935
RUS Rural Utilities Service, previously called the Rural
Electrification Administration
Statement 121 Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of", issued in March
1995 by the FASB, is a new accounting standard requiring
impairment losses on long-lived assets be recognized when
an asset's book value exceeds its expected future cash
flows
the Plan The Cinergy 1996 Long-Term Incentive Compensation Plan
ULH&P The Union Light, Heat and Power Company (a wholly-owned
subsidiary of CG&E)
WVPA Wabash Valley Power Association
Zimmer William H. Zimmer Generating Station
<PAGE>
CINERGY CORP.
AND SUBSIDIARY COMPANIES
<PAGE>
CINERGY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
March 31 December 31
1996 1995
(dollars in thousands)
Utility Plant - Original Cost
In service
Electric $8 645 996 $8 617 695
Gas 684 822 680 339
Common 184 142 184 694
9 514 960 9 482 728
Accumulated depreciation 3 417 926 3 367 432
6 097 034 6 115 296
CWIP 135 045 135 852
Total utility plant 6 232 079 6 251 148
Current Assets
Cash and temporary cash investments 67 562 35 052
Restricted deposits 1 387 2 336
Accounts receivable less accumulated
provision of $10,967 at March 31, 1996,
and $10,360 at December 31, 1995,
for doubtful accounts 191 775 371 150
Materials, supplies, and fuel - at average cost
Fuel for use in electric production 101 280 122 409
Gas stored for current use 8 556 21 493
Other materials and supplies 89 973 85 076
Property taxes applicable to subsequent year 87 617 116 822
Prepayments and other 37 632 32 347
585 782 786 685
Other Assets
Regulatory assets
Amounts due from customers - income taxes 423 611 423 493
Post-in-service carrying costs and deferred
operating expenses 188 113 187 190
Phase-in deferred return and depreciation 99 082 100 388
Deferred DSM costs 130 137 129 400
Deferred merger costs 55 309 56 824
Unamortized costs of reacquiring debt 74 532 73 904
Other 66 585 74 911
Other 185 784 136 121
1 223 153 1 182 231
$8 041 014 $8 220 064
The accompanying notes as they relate to Cinergy are an integral part of these
consolidated financial statements.
<PAGE>
CINERGY CORP.
CAPITALIZATION AND LIABILITIES
March 31 December 31
1996 1995
(dollars in thousands)
Common Stock Equity
Common stock - $.01 par value; authorized
shares - 600,000,000; outstanding shares -
157,679,129 at March 31, 1996, and 157,670,141
at December 31, 1995 $ 1 577 $ 1 577
Paid-in capital 1 595 435 1 597 050
Retained earnings 992 558 950 216
Total common stock equity 2 589 570 2 548 843
Cumulative Preferred Stock of Subsidiaries
Not subject to mandatory redemption 227 885 227 897
Subject to mandatory redemption 160 000 160 000
Long-term Debt 2 522 784 2 530 766
Total capitalization 5 500 239 5 467 506
Current Liabilities
Long-term debt due within one year 60 400 201 900
Notes payable 96 300 165 800
Accounts payable 280 814 268 139
Litigation settlement 80 000 80 000
Accrued taxes 324 170 317 185
Accrued interest 41 807 55 995
Other 53 053 57 202
936 544 1 146 221
Other Liabilities
Deferred income taxes 1 141 769 1 120 900
Unamortized investment tax credits 182 815 185 726
Accrued pension and other postretirement benefit
costs 183 272 171 771
Other 96 375 127 940
1 604 231 1 606 337
$8 041 014 $8 220 064
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Quarter Ended Twelve Months Ended
March 31 March 31
1996 1995 1996 1995
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating Revenues
Electric $684 840 $632 466 $2 664 953 $2 458 673
Gas 199 155 175 211 434 796 388 458
883 995 807 677 3 099 749 2 847 131
Operating Expenses
Fuel used in electric production 191 452 185 909 722 297 722 116
Gas purchased 93 225 94 493 204 982 200 761
Purchased and exchanged power 27 621 5 666 69 587 34 957
Other operation 146 134 116 739 549 985 550 760
Maintenance 43 642 44 322 181 500 199 279
Depreciation 70 195 73 456 276 498 295 650
Amortization of phase-in deferrals 3 400 - 12 491 -
Post-in-service deferred operating
expenses - net (843) (2 004) (1 339) (6 545)
Phase-in deferred depreciation - - - (848)
Income taxes 73 983 62 519 232 893 154 215
Taxes other than income taxes 65 737 63 948 257 322 244 949
714 546 645 048 2 506 216 2 395 294
Operating Income 169 449 162 629 593 533 451 837
Other Income and Expenses - Net
Allowance for equity funds used
during construction 351 954 1 361 3 625
Post-in-service carrying costs 343 2 568 961 10 147
Phase-in deferred return 2 093 2 134 8 496 9 864
Income taxes 3 218 1 094 9 482 10 847
Other - net (7 676) (1 051) (9 676) (29 261)
(1 671) 5 699 10 624 5 222
Income Before Interest and Other Charges 167 778 168 328 604 157 457 059
Interest and Other Charges
Interest on long-term debt 49 135 55 061 207 985 218 162
Other interest 2 871 5 311 18 386 22 321
Allowance for borrowed funds used
during construction (1 138) (2 311) (6 892) (11 452)
Preferred dividend requirements of
subsidiaries 6 769 8 657 28 965 34 630
57 637 66 718 248 444 263 661
Net Income $110 141 $101 610 $ 355 713 $ 193 398
Average Common Shares Outstanding 157 675 155 682 157 113 149 873
Earnings Per Common Share $.70 $.65 $2.27 $1.27
Dividends Declared Per Common Share $.43 $.43 $1.72 $1.55
<FN>
The accompanying notes as they relate to Cinergy are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
(unaudited)
Common Paid-in Retained Total Common
Stock Capital Earnings Stock Equity
(dollars in thousands)
<S> <C> <C> <C> <C>
Quarter Ended March 31, 1996
Balance January 1, 1996 $1 577 $1 597 050 $ 950 216 $2 548 843
Net income 110 141 110 141
Issuance of 8,988 shares of common
stock - net 311 311
Dividends on common stock (see page
8 for per share amounts) (67 799) (67 799)
Other (1 926) (1 926)
Balance March 31, 1996 $1 577 $1 595 435 $ 992 558 $2 589 570
Quarter Ended March 31, 1995
Balance January 1, 1995 $1 552 $1 535 658 $ 877 061 $2 414 271
Net income 101 610 101 610
Issuance of 722,439 shares of
common stock - net 7 18 004 18 011
Common stock issuance expenses (184) (184)
Dividends on common stock (see page
8 for per share amounts) (66 814) (66 814)
Balance March 31, 1995 $1 559 $1 553 478 $ 911 857 $2 466 894
Twelve Months Ended March 31, 1996
Balance April 1, 1995 $1 559 $1 553 478 $ 911 857 $2 466 894
Net income 355 713 355 713
Issuance of 1,758,652 shares of
common stock - net 18 42 650 42 668
Common stock issuance expenses (45) (45)
Dividends on common stock (see page
8 for per share amounts) (269 836) (269 836)
Other (648) (5 176) (5 824)
Balance March 31, 1996 $1 577 $1 595 435 $ 992 558 $2 589 570
Twelve Months Ended March 31, 1995
Balance April 1, 1994 $1 460 $1 329 588 $ 951 553 $2 282 601
Net income 193 398 193 398
Issuance of 8,829,293 shares of
common stock - net 99 228 695 228 794
Common stock issuance expenses (5 386) (5 386)
Dividends on common stock (see page
8 for per share amounts) (232 573) (232 573)
Other 581 (521) 60
Balance March 31, 1995 $1 559 $1 553 478 $ 911 857 $2 466 894
<FN>
The accompanying notes as they relate to Cinergy are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Year to Date Twelve Months Ended
March 31 March 31
1996 1995 1996 1995
(in thousands)
<S> <C> <C> <C> <C>
Operating Activities
Net income $ 110 141 $ 101 610 $ 355 713 $ 193 398
Items providing (using) cash currently
Depreciation 70 195 73 456 276 498 295 650
Deferred income taxes and investment tax
credits - net 16 978 1 769 43 620 24 104
Allowance for equity funds used during
construction (351) (954) (1 361) (3 625)
Regulatory assets - net 9 961 (946) 11 933 (38 537)
Changes in current assets and current
liabilities
Restricted deposits (24) 15 (1 074) 10 105
Accounts receivable, net of reserves on
receivables sold 143 778 20 251 51 886 84 990
Materials, supplies, and fuel 29 169 16 830 63 553 (48 944)
Accounts payable 12 675 (80 462) 94 809 (25 056)
Accrued taxes and interest (7 203) 37 224 12 208 7 998
Other items - net (16 003) 13 343 (17 210) 62 404
Net cash provided by (used in)
operating activities 369 316 182 136 890 575 562 487
Financing Activities
Issuance of common stock 311 17 827 42 623 223 408
Issuance of long-term debt - - 344 280 59 910
Funds on deposit from issuance of long-
term debt 973 5 729 5 231 24 449
Retirement of preferred stock of subsidiaries (5) - (93 471) (40 422)
Redemption of long-term debt (150 289) (87 517) (461 605) (87 952)
Change in short-term debt (69 500) 1 201 (133 801) (16 668)
Dividends on common stock (67 799) (66 814) (269 836) (232 573)
Net cash provided by (used in)
financing activities (286 309) (129 574) (566 579) (69 848)
Investing Activities
Construction expenditures (less allowance
for equity funds used during construction) (49 760) (78 214) (296 451) (468 903)
Deferred DSM costs - net (737) (8 949) (17 061) (48 375)
Equity investment in Argentine utility - - 19 799 -___
Net cash provided by (used in)
investing activities (50 497) (87 163) (293 713) (517 278)
Net increase (decrease) in cash and
temporary cash investments 32 510 (34 601) 30 283 (24 639)
Cash and temporary cash investments at
beginning of period 35 052 71 880 37 279 61 918
Cash and temporary cash investments at
end of period $ 67 562 $ 37 279 $ 67 562 $ 37 279
<FN>
The accompanying notes as they relate to Cinergy are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
CINERGY CORP.
Below is information concerning the consolidated results of operations for
Cinergy for the quarter and twelve months ended March 31, 1996. For
information concerning the results of operations for each of the other
registrants for the same quarter ended, see the discussion under the heading
RESULTS OF OPERATIONS following the financial statements of each company.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996
Kwh Sales
Kwh sales for the quarter ended March 31, 1996, increased 12.7% as compared to
the same period last year. This increase was due to higher kwh sales to all
customer classes. Increased residential and commercial sales reflected colder
weather during the first quarter of 1996 and an increase in the average number
of customers. Sales to industrial customers increased due to growth in the
food products, primary metals, and chemicals sectors. Increased activity in
Cinergy's power marketing operations led to higher non-firm power sales for
resale.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the first quarter of 1996
increased 12.7% as compared to the first quarter of 1995. Colder weather
during the winter heating season and increases in the average number of
customers led to higher gas sales to residential and commercial customers.
Industrial sales decreased as customers continued to purchase gas directly
from suppliers, using transportation services provided by CG&E. The increase
in transportation volumes mainly reflects demand for gas transportation
services in the primary metals and transportation equipment sectors and in
both the non-electrical and electrical machinery sectors.
Operating Revenues
Electric Operating Revenues
Electric operating revenues for the quarter ended March 31, 1996, increased
$53 million (8.3%) as compared to the same period last year. This increase
primarily resulted from increased kwh sales, as previously discussed. In
addition, PSI's 4.3% retail rate increase approved in the February 1995 Order
and a 1.9% rate increase for carrying costs on CWIP property which was
approved by the IURC in March 1995 contributed to the increase. These
increases were partially offset by the operation of fuel adjustment clauses
reflecting a lower average cost of fuel used in electric production.
An analysis of electric operating revenues is shown below:
Quarter
Ended March 31
(in millions)
Electric operating revenues - March 31, 1995 $632
Increase (Decrease) due to change in:
Price per kwh
Retail (6)
Sales for resale
Firm power obligations (5)
Non-firm power transactions 4
Total change in price per kwh (7)
Kwh sales
Retail 41
Sales for resale
Firm power obligations 5
Non-firm power transactions 14
Total change in kwh sales 60
Electric operating revenues - March 31, 1996 $685
Gas Operating Revenues
Gas operating revenues increased $24 million (13.7%) in the first quarter of
1996 when compared to the same period last year. This increase was primarily
a result of the previously discussed changes in gas sales volumes.
Operating Expenses
Purchased and Exchanged Power
Purchased and exchanged power increased $22 million for the quarter ended
March 31, 1996, when compared to the same period last year, primarily
reflecting increased power purchases utilized in connection with increased
non-firm power sales for resale during the period.
Other Operation
Other operation expenses for the quarter ended March 31, 1996, increased $29
million (25.2%), as compared to the same period last year. This increase
reflects the amortization of deferred DSM costs, an increase in the ongoing
level of DSM expenses and higher administrative and general expenses as a
result of a number of items including the recognition by PSI of postretirement
benefit costs on an accrual basis and the amortization of deferred
postretirement benefit costs and deferred Merger Costs, both of which are
being recovered in revenues pursuant to the February 1995 Order.
Phase-in Deferred Return and Amortization of Phase-in Deferrals
Phase-in deferred return and amortization of phase-in deferrals reflect a
PUCO-ordered phase-in plan for Zimmer included in the May 1992 Order. In the
first three years of the rate phase-in plan, rates charged to customers did
not fully recover depreciation expense and return on investment. This
deficiency has been deferred and is being recovered over a seven-year period
that began in May 1995.
Other Income and Expenses - Net
Post-in-service Carrying Costs
Post-in-service carrying costs decreased $2 million (86.6%) for the first
quarter of 1996, from the comparable period of 1995 as a result of PSI's
discontinuing the accrual of post-in-service carrying costs on qualified
environmental projects upon the inclusion in rates of the costs of the
projects pursuant to the February 1995 Order.
Interest and Other Charges
Interest on Long-term Debt and Other Interest
Interest charges decreased $8 million (13.9%) for the three months ended March
31, 1996, from the same period of 1995 primarily due to the refinancing of
over $330 million of long-term debt by CG&E and ULH&P during the period from
March 1995 through November 1995 and the redemption of $151.5 million in the
first quarter of 1996. Additionally, interest on short-term debt decreased as
PSI and ULH&P borrowed funds through an internally funded Money Pool, reducing
outside borrowings at higher interest rates.
Preferred Dividend Requirements of Subsidiaries
The decrease in preferred dividend requirements of subsidiaries of $2 million
(21.8%) for the quarter ended March 31, 1996, from the same period of 1995 was
due to the early redemption in July 1995 of all 400,000 shares and 500,000
shares of CG&E's 7.44% Series and 9.15% Series $100 par value cumulative
preferred stock, respectively.
RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED MARCH 31, 1996
Kwh Sales
Kwh sales increased 8.4% for the twelve months ended March 31, 1996, from the
comparable period of last year reflecting higher kwh sales to all customer
classes. Significantly contributing to the higher kwh sales were increased
sales to residential and commercial customers as a result of warmer weather
during the 1995 summer cooling season and colder weather during the fourth
quarter of 1995 and the first quarter of 1996. Additionally, the increase
reflects a higher average number of residential and commercial customers,
while industrial sales increased primarily due to growth in the primary
metals, chemicals, and food products sectors. Increased activity in Cinergy's
power marketing operations led to higher non-firm power sales for resale.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the twelve months ended March 31,
1996, increased 16.0% when compared to the twelve months ended March 31, 1995.
Colder weather during the 1995 winter heating season led to increases in gas
sales to residential and commercial customers. Industrial sales decreased as
customers continued the previously mentioned shift in demand toward
transportation services. This increase in Mcf transported of 17.3% was mainly
reflective of continued growth in demand for gas transportation services in
the primary metals, transportation equipment, and food products sectors.
Operating Revenues
Electric Operating Revenues
Compared to the same period last year, electric operating revenues for the
twelve months ended March 31, 1996, increased $206 million (8.4%), reflecting
increased kwh sales and PSI's rate increases, as previously discussed and
CG&E's electric rate increase which became effective in May 1994. The
aforementioned operation of fuel adjustment clauses partially offset these
increases.
An analysis of electric operating revenues is shown below:
Twelve Months
Ended March 31
(in millions)
Electric operating revenues - March 31, 1995 $2 459
Increase (Decrease) due to change in:
Price per kwh
Retail 23
Sales for resale
Firm power obligations (10)
Non-firm power transactions 11
Total change in price per kwh 24
Kwh sales
Retail 153
Sales for resale
Firm power obligations 10
Non-firm power transactions 20
Total change in kwh sales 183
Other (1)
Electric operating revenues - March 31, 1996 $2 665
Gas Operating Revenues
Gas operating revenues increased $46 million (11.9%) for the twelve months
ended March 31, 1996, when compared to the same period last year. This
increase was primarily a result of the previously discussed changes in gas
sales volumes and was partially offset by the operation of fuel adjustment
clauses reflecting a decline in the average cost of gas purchased for the
period. An increase in the relative volume of gas transported to gas sold, as
previously discussed, also served to partially offset this increase.
Providing transportation services does not necessitate the recovery of gas
purchased costs by CG&E. Consequently, the revenue per Mcf transported is
below the revenue per Mcf sold.
Operating Expenses
Purchased and Exchanged Power
Purchased and exchanged power increased $35 million (99.1%) for the twelve
months ended March 31, 1996, when compared to the same period of last year,
reflecting increased power purchases utilized in connection with increased
non-firm power sales for resale during the period.
Maintenance
The decrease in maintenance expense of $18 million (8.9%) for the twelve
months ended March 31, 1996, as compared to the same period of last year, was
primarily due to reduced maintenance on electric production and electric and
gas distribution facilities.
Depreciation
Depreciation expense decreased $19 million (6.5%) for the twelve months ended
March 31, 1996, as compared to the same period of last year. This decrease
primarily reflects the adoption of lower depreciation rates by PSI effective
in March 1995 pursuant to the February 1995 Order.
Phase-in Deferred Return and Amortization of Phase-in Deferrals
As previously discussed, phase-in deferred return and amortization of phase-in
deferrals reflect the PUCO-ordered phase-in plan for Zimmer included in the
May 1992 Order.
Post-in-service Deferred Operating Expenses-Net
Post-in-service deferred operating expenses decreased $5 million (79.5%) for
the twelve months ended March 31, 1996, from the comparable period of last
year as a result of PSI's ceasing deferral of depreciation on qualified
environmental projects upon the inclusion in rates of the costs of the
projects pursuant to the February 1995 Order.
Taxes Other than Income Taxes
Taxes other than income taxes increased $12 million (5.1%) over the same
period of 1995 primarily due to increased property taxes resulting from a
greater investment in taxable property and higher property tax rates.
Other Income and Expenses - Net
Post-in-service Carrying Costs
Post-in-service carrying costs decreased $9 million (90.5%) for the twelve
months ended March 31, 1996, from the comparable period of last year. This
decrease is a result of PSI's discontinuing the accrual of post-in-service
carrying costs on qualified environmental projects upon the inclusion in rates
of the costs of the projects pursuant to the February 1995 Order.
Other - net
Other - net increased $20 million (66.9%) for the twelve months ended March
31, 1996, reflecting $4 million of interest on an income tax refund related to
prior years, a $10 million gain on the sale of Cinergy's investment in an
Argentine utility, and charges of $17 million in 1994 for merger-related and
other expenditures which cannot be recovered from customers. These items were
partially offset by a number of factors, including charges associated with
winding down certain non-utility activities during 1995.
Interest and Other Charges
Interest on Long-term Debt and Other Interest
Interest charges decreased $14 million (5.9%) for the twelve months ended
March 31, 1996, from the same period of 1995 primarily due to the refinancing
of over $330 million of long-term debt by CG&E and ULH&P during the period
from March 1995 through November 1995 and the redemption of $151.5 million in
the first quarter of 1996. Additionally, interest on short-term debt
decreased as PSI and ULH&P borrowed funds through an internally funded Money
Pool, reducing outside borrowings at higher interest rates.
Preferred Dividend Requirements of Subsidiaries
The decrease in the preferred dividend requirements of subsidiaries of $6
million (16.4%) for the twelve months ended March 31, 1996, from the same
period of 1995 was primarily due to the early redemption in July 1995 of all
400,000 shares and 500,000 shares of CG&E's 7.44% Series and 9.15% Series $100
par value cumulative preferred stock, respectively.
<PAGE>
THE CINCINNATI GAS &
ELECTRIC COMPANY
AND SUBSIDIARY COMPANIES
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
March 31 December 31
1996 1995
(dollars in thousands)
Utility Plant - Original Cost
In service
Electric $4 584 216 $4 564 711
Gas 684 822 680 339
Common 182 871 183 422
5 451 909 5 428 472
Accumulated depreciation 1 766 273 1 730 232
3 685 636 3 698 240
CWIP 74 017 77 661
Total utility plant 3 759 653 3 775 901
Current Assets
Cash and temporary cash investments 47 967 6 612
Restricted deposits 1 168 1 144
Notes receivable from affiliated companies 77 872 24 715
Accounts receivable less accumulated provision
of $10,481 at March 31, 1996, and $9,615 at
December 31, 1995, for doubtful accounts 104 842 292 493
Accounts receivable from affiliated companies 16 717 17 162
Materials, supplies, and fuel - at average cost
Fuel for use in electric production 30 145 40 395
Gas stored for current use 8 556 21 493
Other materials and supplies 57 610 55 388
Property taxes applicable to subsequent year 87 617 116 822
Prepayments and other 34 828 30 572
467 322 606 796
Other Assets
Regulatory assets
Amounts due from customers - income taxes 390 783 397 155
Post-in-service carrying costs and deferred
operating expenses 147 230 148 316
Phase-in deferred return and depreciation 99 082 100 388
Deferred DSM costs 23 426 19 158
Deferred merger costs 14 403 14 538
Unamortized costs of reacquiring debt 40 687 39 428
Other 36 124 41 025
Other 79 381 54 691
831 116 814 699
$5 058 091 $5 197 396
The accompanying notes as they relate to CG&E are an integral part of these
consolidated financial statements.
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
CAPITALIZATION AND LIABILITIES
March 31 December 31
1996 1995
(dollars in thousands)
Common Stock Equity
Common stock - $8.50 par value; authorized shares
- 120,000,000; outstanding shares - 89,663,086
at March 31, 1996, and December 31, 1995 $ 762 136 $ 762 136
Paid-in capital 339 101 339 101
Retained earnings 473 512 427 226
Total common stock equity 1 574 749 1 528 463
Cumulative Preferred Stock
Not subject to mandatory redemption 40 000 40 000
Subject to mandatory redemption 160 000 160 000
Long-term Debt 1 694 391 1 702 650
Total capitalization 3 469 140 3 431 113
Current Liabilities
Long-term debt due within one year 10 000 151 500
Accounts payable 161 840 138 735
Accounts payable to affiliated companies 4 160 20 468
Accrued taxes 226 206 250 189
Accrued interest 30 149 31 299
Other 36 898 40 409
469 253 632 600
Other Liabilities
Deferred income taxes 810 257 795 385
Unamortized investment tax credits 127 361 129 372
Accrued pension and other postretirement benefit
costs 122 863 117 641
Other 59 217 91 285
1 119 698 1 133 683
$5 058 091 $5 197 396
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Quarter Ended
March 31
1996 1995
(in thousands)
Operating Revenues
Electric (including $12,348 and $6,949 from
affiliated companies for 1996 and 1995,
respectively) $375 629 $349 956
Gas 199 155 175 211
574 784 525 167
Operating Expenses
Fuel used in electric production 97 107 84 073
Gas purchased 93 225 94 493
Purchased and exchanged power
Non-affiliated companies 6 433 916
Affiliated companies 6 736 9 589
Other operation 79 580 68 922
Maintenance 20 979 23 533
Depreciation 39 987 39 537
Amortization of phase-in deferrals 3 400 -
Amortization of post-in-service deferred operating
expenses 823 823
Income taxes 54 890 43 346
Taxes other than income taxes 51 569 50 656
454 729 415 888
Operating Income 120 055 109 279
Other Income and Expenses - Net
Allowance for equity funds used
during construction 351 596
Phase-in deferred return 2 093 2 134
Income taxes 1 681 1 207
Other - net (686) 965
3 439 4 902
Income Before Interest 123 494 114 181
Interest
Interest on long-term debt 32 100 37 111
Other interest 462 826
Allowance for borrowed funds used
during construction (823) (980)
31 739 36 957
Net Income 91 755 77 224
Preferred Dividend Requirement 3 474 5 362
Net Income Applicable to Common Stock $ 88 281 $ 71 862
The accompanying notes as they relate to CG&E are an integral part of these
consolidated financial statements.
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Year to Date
March 31
1996 1995
(in thousands)
Operating Activities
Net income $ 91 755 $ 77 224
Items providing (using) cash currently
Depreciation 39 987 39 537
Deferred income taxes and investment
tax credits - net 19 368 (2 056)
Allowance for equity funds used
during construction (351) (596)
Regulatory assets - net 7 165 3 007
Changes in current assets and current
liabilities
Restricted deposits (24) (1)
Accounts and notes receivable, net of
reserves on receivables sold 111 135 16 428
Materials, supplies, and fuel 20 965 18 867
Accounts payable 6 797 (30 544)
Accrued taxes and interest (25 133) 27 362
Other items - net (6 590) 10 159
Net cash provided by (used in)
operating activities 265 074 159 387
Financing Activities
Redemption of long-term debt (150 289) (87 462)
Change in short-term debt - (13 500)
Dividends on preferred stock (3 474) (5 362)
Dividends on common stock (41 995) (51 650)
Net cash provided by (used in)
financing activities (195 758) (157 974)
Investing Activities
Construction expenditures (less
allowance for equity funds used
during construction) (23 693) (35 727)
Deferred DSM costs - net (4 268) (2 139)
Net cash provided by (used in)
investing activities (27 961) (37 866)
Net increase (decrease) in cash and
temporary cash investments 41 355 (36 453)
Cash and temporary cash investments at
beginning of period 6 612 52 516
Cash and temporary cash investments at
end of period $ 47 967 $ 16 063
The accompanying notes as they relate to CG&E are an integral part of these
consolidated financial statements.
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996
Kwh Sales
Kwh sales for the quarter ended March 31, 1996, increased 13.7% over the same
period of 1995, due in large part to higher non-firm power sales for resale to
PSI. Also contributing to the total kwh sales levels were increased sales to
all retail customer classes. Higher residential and commercial sales resulted
from colder weather during the period and increases in the average number of
customers. Increased industrial sales primarily reflect growth in the primary
metals sector.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the first quarter of 1996
increased 12.7% as compared to the first quarter of 1995. Colder weather
during the winter heating season and increases in the average number of
customers led to higher gas sales to residential and commercial customers.
Industrial sales decreased as customers continued to purchase gas directly
from suppliers, using transportation services provided by CG&E. The increase
in transportation volumes mainly reflects demand for gas transportation
services in the primary metals and transportation equipment sectors and in
both the non-electrical and electrical machinery sectors.
Operating Revenues
Electric Operating Revenues
Electric operating revenues increased $26 million (7.3%) for the quarter ended
March 31, 1996, over the comparable period of 1995. This increase primarily
reflects the higher kwh sales discussed above.
An analysis of electric operating revenues is shown below:
Quarter
Ended March 31
(in millions)
Electric operating revenues - March 31, 1995 $350
Increase (Decrease) due to change in:
Price per kwh
Retail (1)
Sales for resale
Non-firm power transactions (7)
Total change in price per kwh (8)
Kwh sales
Retail 21
Sales for resale
Non-firm power transactions 13
Total change in kwh sales 34
Electric operating revenues - March 31, 1996 $376
Gas Operating Revenues
Gas operating revenues increased $24 million (13.7%) in the first quarter of
1996 when compared to the same period last year. This increase was primarily
a result of the previously discussed changes in gas sales volumes.
Operating Expenses
Fuel Used in Electric Production
Electric fuel costs increased $13 million (15.5%) for the quarter as compared
to last year.
An analysis of these fuel costs is shown below:
Quarter
Ended March 31
(in millions)
Fuel expense - March 31, 1995 $84
Increase due to change in:
Price of fuel 5
Kwh generation 8
Fuel expense - March 31, 1996 $97
Purchased and Exchanged Power
Purchased and exchanged power for the quarter ended March 31, 1996, increased
$3 million (25.4%) over the comparable period of 1995. This increase
primarily reflects increased power purchases utilized in connection with
increased non-firm power sales for resale.
Other Operation
For the three months ended March 31, 1996, other operation expenses increased
$11 million (15.5%) due to a number of factors, including higher
administrative and general expenses and increased gas distribution expenses.
Decreased electric distribution expenses partially offset these increases.
Maintenance
The $3 million (10.9%) decrease in maintenance expense for the first quarter
of 1996 as compared to the same period of 1995 is due to reduced maintenance
on electric production and distribution facilities.
Phase-in Deferred Return and Amortization of Phase-in Deferrals
Phase-in deferred return and amortization of phase-in deferrals reflect a
PUCO-ordered phase-in plan for Zimmer included in the May 1992 Order. In the
first three years of the rate phase-in plan, rates charged to customers did
not fully recover depreciation expense and return on investment. This
deficiency has been deferred and is being recovered over a seven-year period
that began in May 1995.
Interest
Interest charges decreased $5 million (14.1%) for the three months ended March
31, 1996, from the same period of 1995 primarily due to the refinancing of
over $330 million of long-term debt during the period from March 1995 through
November 1995 and the redemption of $151.5 million in the first quarter of
1996.
Preferred Dividend Requirement
The decrease in the preferred dividend requirement of $2 million (35.2%) for
the quarter ended March 31, 1996, from the same period of 1995 was due to the
early redemption in July 1995 of all 400,000 shares and 500,000 shares of
CG&E's 7.44% Series and 9.15% Series $100 par value cumulative preferred
stock, respectively.
<PAGE>
PSI ENERGY, INC.
AND SUBSIDIARY COMPANIES
<PAGE>
PSI ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
ASSETS
March 31 December 31
1996 1995
(dollars in thousands)
Electric Utility Plant - Original Cost
In service $4 061 780 $4 052 984
Accumulated depreciation 1 651 591 1 637 169
2 410 189 2 415 815
CWIP 60 924 58 191
Total electric utility plant 2 471 113 2 474 006
Current Assets
Cash and temporary cash investments 8 592 15 522
Restricted deposits 214 1 187
Accounts receivable less accumulated provision
of $231 at March 31, 1996, and $468 at
December 31, 1995, for doubtful accounts 79 841 73 419
Accounts receivable from affiliated companies 10 027 20 568
Materials, supplies, and fuel - at average cost
Fuel 71 135 82 014
Other materials and supplies 32 165 29 462
Prepayments and other 2 291 1 234
204 265 223 406
Other Assets
Regulatory assets
Amounts due from customers - income taxes 32 828 26 338
Post-in-service carrying costs and deferred
operating expenses 40 883 38 874
Deferred DSM costs 106 711 110 242
Deferred merger costs 40 906 42 286
Unamortized costs of reacquiring debt 33 845 34 476
Other 30 461 33 886
Other 110 103 92 056
395 737 378 158
$3 071 115 $3 075 570
The accompanying notes as they relate to PSI are an integral part of these
consolidated financial statements.
<PAGE>
PSI ENERGY, INC.
CAPITALIZATION AND LIABILITIES
March 31 December 31
1996 1995
(dollars in thousands)
Common Stock Equity
Common stock - without par value; $.01 stated
value; authorized shares - 60,000,000;
outstanding shares - 53,913,701 at
March 31, 1996, and December 31, 1995 $ 539 $ 539
Paid-in capital 403 259 403 253
Accumulated earnings subsequent to November 30,
1986, quasi-reorganization 622 958 625 275
Total common stock equity 1 026 756 1 029 067
Cumulative Preferred Stock
Not subject to mandatory redemption 187 885 187 897
Long-term Debt 828 393 828 116
Total capitalization 2 043 034 2 045 080
Current Liabilities
Long-term debt due within one year 50 400 50 400
Notes payable 92 900 165 800
Notes payable to affiliated companies 73 865 32 731
Accounts payable 110 424 116 817
Accounts payable to affiliated companies 4 701 -
Litigation settlement 80 000 80 000
Accrued taxes 97 489 65 851
Accrued interest 11 652 24 696
Other 16 155 16 000
537 586 552 295
Other Liabilities
Deferred income taxes 338 334 331 876
Unamortized investment tax credits 55 454 56 354
Accrued pension and other postretirement
benefit costs 60 409 54 130
Other 36 298 35 835
490 495 478 195
$3 071 115 $3 075 570
<PAGE>
PSI ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Quarter Ended
March 31
1996 1995
(in thousands)
Operating Revenues
Revenues (including $6,736 and $9,589
from affiliated companies for 1996 and 1995,
respectively) $328 295 $299 048
Operating Expenses
Fuel 94 345 101 836
Purchased and exchanged power
Non-affiliated companies 21 188 4 750
Affiliated companies 12 348 6 949
Other operation 66 551 47 815
Maintenance 22 663 20 789
Depreciation 30 208 33 919
Post-in-service deferred operating
expenses - net (1 666) (2 827)
Income taxes 18 883 19 173
Taxes other than income taxes 14 168 13 292
278 688 245 696
Operating Income 49 607 53 352
Other Income and Expenses - Net
Allowance for equity funds used
during construction - 358
Post-in-service carrying costs 343 2 568
Income taxes 760 (303)
Other - net (3 658) (1 912)
(2 555) 711
Income Before Interest 47 052 54 063
Interest
Interest on long-term debt 17 035 17 950
Other interest 3 468 3 977
Allowance for borrowed funds used
during construction (315) (1 331)
20 188 20 596
Net Income 26 864 33 467
Preferred Dividend Requirement 3 295 3 295
Net Income Applicable to Common Stock $ 23 569 $ 30 172
The accompanying notes as they relate to PSI are an integral part of these
consolidated financial statements.
<PAGE>
PSI ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Year to Date
March 31
1996 1995
(in thousands)
Operating Activities
Net income $ 26 864 $ 33 467
Items providing (using) cash currently
Depreciation 30 208 33 919
Deferred income taxes and investment
tax credits - net (1 926) 5 510
Allowance for equity funds used
during construction - (358)
Regulatory assets - net 2 796 (3 954)
Changes in current assets and current
liabilities
Restricted deposits - 16
Accounts receivable, net of reserves on
receivables sold (7 674) 2 227
Materials, supplies, and fuel 8 176 (2 244)
Accounts payable (1 692) (43 113)
Accrued taxes and interest 18 594 10 730
Other items - net 239 650
Net cash provided by (used in)
operating activities 75 585 36 850
Financing Activities
Funds on deposit from issuance of long-
term debt 973 5 729
Retirement of preferred stock (5) -
Redemption of long-term debt - (55)
Change in short-term debt (31 766) 14 528
Dividends on preferred stock (3 294) (3 295)
Dividends on common stock (25 887) -___
Net cash provided by (used in)
financing activities (59 979) 16 907
Investing Activities
Construction expenditures (less
allowance for equity funds used
during construction) (26 067) (42 487)
Deferred DSM costs - net 3 531 (6 810)
Net cash provided by (used in)
investing activities (22 536) (49 297)
Net increase (decrease) in cash and
temporary cash investments (6 930) 4 460
Cash and temporary cash investments at
beginning of period 15 522 6 341
Cash and temporary cash investments at
end of period $ 8 592 $ 10 801
The accompanying notes as they relate to PSI are an integral part of these
consolidated financial statements.
<PAGE>
PSI ENERGY, INC.
RESULT OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996
Kwh Sales
Kwh sales for the first quarter of 1996 increased 18.2% when compared to the
same period last year. Increased activity in Cinergy's power marketing
operations led to higher non-firm power sales for resale. This increase also
reflects higher kwh sales to residential and commercial customers as a result
of colder weather in the first quarter of 1996 and an increase in the number
of residential and commercial customers. Growth in the food products, primary
metals, and chemicals sectors of industrial sales also contributed to the
increased kwh sales level.
Operating Revenues
Total operating revenues increased $29 million (9.8%) for the quarter ended
March 31, 1996, over the same period last year, reflecting the increased kwh
sales previously discussed. Also contributing to the increase was a 4.3%
retail rate increase approved in the February 1995 Order and a 1.9% rate
increase for carrying costs on CWIP property which was approved by the IURC in
March 1995. Partially offsetting these increases were the operation of fuel
adjustment clauses reflecting a lower average cost of fuel used in electric
production.
An analysis of operating revenues is shown below:
Quarter
Ended March 31
(in millions)
Operating revenues - March 31, 1995 $299
Increase (Decrease) due to change in:
Price per kwh
Retail (4)
Sales for resale
Firm power obligations (5)
Non-firm power transactions (2)
Total change in price per kwh (11)
Kwh sales
Retail 20
Sales for resale
Firm power obligations 4
Non-firm power transactions 17
Total change in kwh sales 41
Other (1)
Operating revenues - March 31, 1996 $328
Operating Expenses
Fuel
Fuel costs, PSI's largest operating expense, decreased $7 million (7.4%) for
the first quarter of 1996 as compared to the same period last year, due to a
decrease in the price of fuel. Kwh generation remained relatively unchanged
during the period.
Purchased and Exchanged Power
For the quarter ended March 31, 1996, purchased and exchanged power increased
$22 million, as compared to the same period last year, primarily reflecting
increased purchases of non-firm power for resale to other utilities and
increased purchases from CG&E as a result of the coordination of PSI's and
CG&E's electric dispatch systems.
Other Operation
Other operation expenses for the quarter ended March 31, 1996, increased $19
million (39.2%), as compared to the same period last year. This increase was
due to a number of factors, including the recognition of postretirement
benefit costs on an accrual basis, an increase in the ongoing level of DSM
expenses, and the amortization of deferred postretirement benefit costs,
deferred Merger Costs, and deferred DSM costs, all of which are being
recovered in revenues pursuant to the February 1995 Order.
Maintenance
Maintenance expenses for the first quarter of 1996, as compared to the same
period last year increased $2 million (9.0%) as a result of higher costs on
distribution facilities.
Depreciation
Depreciation expense decreased $4 million (10.9%) for the quarter ended March
31, 1996, as compared to the first quarter of last year. This decrease
primarily reflects the adoption of lower depreciation rates effective in March
1995 pursuant to the February 1995 Order.
Post-in-service Deferred Operating Expenses - Net
The change of $1 million (41.1%) in post-in-service deferred operating
expenses - net for the quarter ended March 31, 1996, when compared to the same
period last year as a result of ceasing deferral of depreciation on qualified
environmental projects upon the inclusion in rates of the costs of the
projects pursuant to the February 1995 Order.
Other Income and Expenses - Net
Post-in-service Carrying Costs
Post-in-service carrying costs decreased $2 million (86.6%) for the first
quarter of 1996, from the comparable period of 1995 as a result of
discontinuing the accrual of post-in-service carrying costs on qualified
environmental projects upon the inclusion in rates of the costs of the
projects pursuant to the February 1995 Order.
Interest
Allowance for Borrowed Funds Used During Construction
Allowance for borrowed funds used during construction decreased $1 million
(76.3%) for the first quarter of 1996, over the comparable period of 1995,
primarily as a result of the decrease in the average balance of CWIP due to
the Clean Coal Project being placed in-service. Partially offsetting this
decrease was an increase in the debt component of the AFUDC rate.
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
BALANCE SHEETS
(unaudited)
ASSETS
March 31 December 31
1996 1995
(dollars in thousands)
Utility Plant - Original Cost
In service
Electric $190 238 $188 508
Gas 141 930 140 604
Common 19 067 19 068
351 235 348 180
Accumulated depreciation 115 405 112 812
235 830 235 368
CWIP 7 848 7 863
Total utility plant 243 678 243 231
Current Assets
Cash and temporary cash investments 8 989 1 750
Accounts receivable less accumulated provision
of $1,180 at March 31, 1996, and $1,035
at December 31, 1995, for doubtful accounts 18 850 37 895
Accounts receivable from affiliated companies 30 -
Materials, supplies, and fuel - at average cost
Gas stored for current use 2 253 4 513
Other materials and supplies 1 316 1 215
Property taxes applicable to subsequent year 1 763 2 350
Prepayments and other 306 485
33 507 48 208
Other Assets
Regulatory assets
Deferred merger costs 1 785 1 785
Unamortized costs of reacquiring debt 3 417 2 526
Other 2 569 2 548
Other 4 338 1 499
12 109 8 358
$289 294 $299 797
The accompanying notes as they relate to ULH&P are an integral part of these
financial statements.
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
CAPITALIZATION AND LIABILITIES
March 31 December 31
1996 1995
(dollars in thousands)
Common Stock Equity
Common stock - $15.00 par value; authorized
shares - 1,000,000; outstanding shares -
585,333 at March 31, 1996, and December 31,
1995 $ 8 780 $ 8 780
Paid-in capital 18 839 18 839
Retained earnings 91 119 82 863
Total common stock equity 118 738 110 482
Long-term Debt 44 582 54 377
Total capitalization 163 320 164 859
Current Liabilities
Long-term debt due within one year 10 000 15 000
Accounts payable 15 556 11 057
Accounts payable to affiliated companies 32 834 44 708
Accrued taxes 5 434 1 993
Accrued interest 1 207 1 549
Other 4 537 5 505
69 568 79 812
Other Liabilities
Deferred income taxes 26 330 23 728
Unamortized investment tax credits 5 009 5 079
Accrued pension and other postretirement
benefit costs 12 622 12 202
Amounts due to customers - income taxes 4 867 4 717
Other 7 578 9 400
56 406 55 126
$289 294 $299 797
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF INCOME
(unaudited)
Quarter Ended
March 31
1996 1995
(in thousands)
Operating Revenues
Electric $52 333 $39 559
Gas 34 058 30 503
86 391 70 062
Operating Expenses
Electricity purchased from parent company
for resale 37 600 30 039
Gas purchased 18 998 17 560
Other operation 9 247 7 795
Maintenance 1 166 1 153
Depreciation 2 907 2 775
Income taxes 5 511 3 088
Taxes other than income taxes 1 071 1 008
76 500 63 418
Operating Income 9 891 6 644
Other Income and Expenses - Net
Allowance for equity funds used
during construction (21) (11)
Income taxes (4) (4)
Other - net (219) (4)
(244) (19)
Income Before Interest 9 647 6 625
Interest
Interest on long-term debt 1 294 2 039
Other interest 107 165
Allowance for borrowed funds used
during construction (10) (65)
1 391 2 139
Net Income $ 8 256 $ 4 486
The accompanying notes as they relate to ULH&P are an integral part of these
financial statements.
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Year to Date
March 31
1996 1995
(in thousands)
Operating Activities
Net income $ 8 256 $ 4 486
Items providing (using) cash currently
Depreciation 2 907 2 775
Deferred income taxes and investment
tax credits - net 2 682 (848)
Allowance for equity funds used
during construction 21 11
Regulatory assets - net (21) (1 615)
Changes in current assets and current
liabilities
Accounts receivable, net of reserves on
receivables sold 15 823 5 095
Materials, supplies, and fuel 2 159 3 475
Accounts payable (7 375) (4 008)
Accrued taxes and interest 3 099 3 793
Other items - net (643) 6 039
Net cash provided by (used in)
operating activities 26 908 19 203
Financing Activities
Redemption of long-term debt (16 032) -
Change in short-term debt - (13 500)
Net cash provided by (used in)
financing activities (16 032) (13 500)
Investing Activities
Construction expenditures (less
allowance for equity funds used
during construction) (3 637) (5 233)
Net cash provided by (used in)
investing activities (3 637) (5 233)
Net increase (decrease) in cash and
temporary cash investments 7 239 470
Cash and temporary cash investments at
beginning of period 1 750 1 071
Cash and temporary cash investments at
end of period $ 8 989 $ 1 541
The accompanying notes as they relate to ULH&P are an integral part of these
financial statements.
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996
Kwh Sales
Kwh sales for the quarter ended March 31, 1996, increased 28.7% from the same
period of 1995, reflecting increased sales to all retail customer classes.
Contributing significantly to this increase were higher residential and
commercial sales due to colder weather during the winter heating season and
increases in the average number of customers. Higher industrial sales reflect
growth in the food products and printing and publishing sectors.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the first quarter of 1996
increased 15.3% as compared to the first quarter of 1995. Colder weather
during the winter heating season led to increases in gas sales to residential
and commercial customers. Industrial sales decreased as customers continued
to purchase gas directly from suppliers, using transportation services
provided by ULH&P. The increase in transportation volumes was primarily a
result of growth in the primary metals and food products sectors.
Operating Revenues
Electric Operating Revenues
Electric operating revenues increased $12.8 million (32.3%) for the quarter
ended March 31, 1996, over the comparable period of 1995. This increase
primarily reflects the previously discussed increase in kwh sales.
An analysis of electric operating revenues is shown below:
Quarter
Ended March 31
(in thousands)
Electric operating revenues - March 31, 1995 $39 559
Increase (Decrease) due to change in:
Price per kwh
Retail 1 439
Firm power sales for resale 3
Total change in price per kwh 1 442
Kwh sales
Retail 11 256
Firm power sales for resale 41
Total change in kwh sales 11 297
Other 35
Electric operating revenues - March 31, 1996 $52 333
Gas Operating Revenues
Gas operating revenues increased $3.6 million (11.7%) in the first quarter of
1996 when compared to the same period of last year. This increase was
primarily a result of the previously discussed changes in gas sales volumes.
Operating Expenses
Electricity Purchased from Parent Company for Resale
Electricity purchased expense, ULH&P's largest operating expense, increased
$7.6 million (25.2%) for the quarter as compared to last year.
An analysis of electricity purchased expense is shown below:
Quarter
Ended March 31
(in thousands)
Electricity purchased expense - March 31, 1995 $30 039
Increase (Decrease) due to change in:
Price of electricity 423
Kwh purchased 7 138
Electricity purchased expense - March 31, 1996 $37 600
Gas Purchased
Gas purchased for the quarter increased $1.4 million (8.2%) from the first
quarter of last year reflecting a 13.6% increase in volumes purchased which
was partially offset by a 4.8% decline in the average cost per Mcf purchased.
Other Operation
For the three months ended March 31, 1996, other operation expenses increased
$1.5 million (18.6%) due to a number of factors, including higher
administrative and general expenses and increased gas distribution expenses.
Depreciation
Depreciation expense increased $.1 million (4.8%) for the quarter ended March
31, 1996, over the comparable period of last year. The increase primarily
reflects additions to gas and electric utility plant.
Interest
Interest charges decreased $.7 million (35.0%) for the three months ended
March 31, 1996, from the same period of 1995 primarily due to the refinancing
of $15 million and $20 million of long-term debt in June 1995 and September
1995, respectively, and the redemption of $15 million in the first quarter of
1996.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Cinergy, CG&E, PSI, and ULH&P
1. These Financial Statements reflect all adjustments (which include only
normal, recurring adjustments) necessary in the opinion of the
registrants for a fair presentation of the interim results. These
statements should be read in conjunction with the Financial Statements
and the notes thereto included in the combined 1995 Form 10-K of the
registrants. Certain amounts in the 1995 Financial Statements have been
reclassified to conform to the 1996 presentation.
Cinergy, CG&E, and ULH&P
2. On May 1, 1996, ULH&P redeemed the entire $10 million principal amount
of its 9 1/2% Series First Mortgage Bonds due December 1, 2008, at the
redemption price of 104.35%.
Cinergy and PSI
3. As discussed in Cinergy's and PSI's 1995 Form 10-K, RUS requested a
rehearing on the affirmation by the Seventh Circuit Court of Appeals of
WVPA's plan of reorganization which has been approved by the United
States Bankruptcy Court for the Southern District of Indiana and upheld
by the United States District Court for the Southern District of Indiana.
In April 1996, the Seventh Circuit Court of Appeals denied RUS' request
for rehearing. RUS' remaining option is to appeal this decision to the
U.S. Supreme Court within 90 days from the date of the Seventh Circuit
Court of Appeal's latest decision. PSI cannot predict whether RUS will
appeal this decision to the U.S. Supreme Court, and if appealed, the
outcome of such appeal.
Cinergy, CG&E, PSI, and ULH&P
4. In March 1995, the FASB issued Statement 121, which became effective in
January 1996 for Cinergy and its subsidiaries. Statement 121, which
addresses the identification and measurement of asset impairments for all
enterprises, is particularly relevant for electric utilities as a result
of the potential for deregulation of the generation segment of the
business. Statement 121 requires recognition of impairment losses on
long-lived assets when book values exceed expected future cash flows.
Based on the regulatory environment in which Cinergy's utility
subsidiaries currently operate, compliance with the provisions of
Statement 121 has not had nor is it expected to have an adverse effect on
their financial condition or results of operations. However, this
conclusion may change in the future as competitive pressures and
potential restructuring influence the electric utility industry.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Recent Developments
Cinergy
Joint Venture On May 7, 1996, Cinergy, GPU, and Midlands announced the terms
of a recommended cash offer for Midlands to be made by Avon Energy. Cinergy
and GPU each indirectly own 50% of Avon Energy. On May 13, 1996, Avon Energy
commenced the offer to acquire all of the shares of Midlands on the terms and
subject to conditions set out in an offering documents. As of May 14, 1996,
Avon Energy owns or has agreed to acquire 114.9 million of Midlands shares,
representing approximately 29% of the issued share capital of Midlands. The
total acquisition cost of Midlands is expected to be approximately (Pound
Sterling) 1.7 billion (or approximately $2.6 billion - U.S.)1. It is
currently anticipated that the offer transaction could be completed in the
third quarter of 1996. Midlands, one of 12 regional electric companies in he
United Kingdom, is headquartered in Birmingham, England. Midlands' principal
business is the distribution of electricity to approximately 2.2 million
customers. For further information, reference is made to Cinergy's Current
Report on Form 8-K dated May 7, 1996.
Following the announcement of the potential acquisition of Midlands, three
major credit rating agencies, Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc., and Standard & Poor's, affirmed the current ratings of
Cinergy's operating subsidiaries, after their consideration of the effects of
the potential acquisition. The other major credit rating agency, Moody's
placed the credit ratings of Cinergy's operating subsidiaries, CG&E, PSI, and
_______
1 Assumes an average exchange ratio of 1.51 U.S. dollars to 1.00 British Pound
Sterling for the shares purchased.
ULH&P, under review for possible downgrade. Moody's indicated that its review
will focus on the likelihood of the transaction being completed and will
assess the operating strategies of the combined companies and the anticipated
benefits of the transaction. It will also focus on the financial impact the
transaction will have on Cinergy and its operating subsidiaries, including the
credit implications. Cinergy cannot predict the outcome of this review.
Cinergy and PSI
Contract Negotiations The Labor Agreement between PSI and IBEW Local 1393 was
scheduled to expire May 1, 1996. Union members voted to reject PSI's initial
offer on May 3, 1996. Although this vote authorized a strike, the union
agreed to continue working under terms of the existing contract pending the
outcome of negotiations. PSI made a revised contract offer to the union on
May 9, 1996, and the contract was extended to May 24, 1996, pending the result
of the vote of union members on the revised offer. Neither Cinergy nor PSI
can predict whether a work stoppage will occur if the revised offer is
rejected, nor the duration of such stoppage if it occurs.
Regulatory Matters
Cinergy, CG&E, PSI, and ULH&P
Mega-NOPR On April 24, 1996, the FERC issued final orders relating to its
previously issued mega-NOPR. The unanimously-passed final rules contain
essentially the same provisions as the mega-NOPR. Additionally, the FERC
concurrently issued a related NOPR which proposes to establish a new system
for utilities to use in reserving capacity on their own and others'
transmission lines.
The final rules provide for mandatory filing of open access/comparability
transmission tariffs, provide for functional unbundling of all services,
require utilities to use the filed tariffs for their own bulk power
transactions, establish an electronic bulletin board for transmission
availability and pricing information, and establish a contract-based approach
to recovering any potential stranded costs as a result of customer choice at
the wholesale level. The FERC expects the rules to "accelerate competition
and bring lower prices and more choices to energy customers". The final rules
become effective in 60 days.
Accounting Issues
Cinergy, CG&E, PSI, and ULH&P
New Accounting Standard See Note 4 of the "Notes to Financial Statements" in
"Part I. Financial Information."
Capital Resources
Cinergy, CG&E, and ULH&P
Long-term Debt For information regarding recent securities redemptions, see
Note 2 of the "Notes to Financial Statements" in "Part I. Financial
Information."
Cinergy, CG&E, PSI, and ULH&P
Short-term Debt The operating subsidiary companies of Cinergy have the
following short-term debt authorizations and lines of credit:
Committed Unused
Authorized Lines__ Lines
(in millions)
Cinergy & Subsidiaries $838 $281 $215
CG&E 400 80 80
PSI 400 200 134
ULH&P 35 - -
Additionally, in connection with the tender offer to purchase Midlands,
Cinergy has established a $600 million credit facility, which expires in May
2001, of which $216 million remained unused as of May 14, 1996. This new
credit facility was established, in part, to fund the acquisition of Midlands
($460 million will be used for this purpose) with the remaining portion
available for general corporate purposes. The prior $100 million credit
facility, which would have expired in September 1997, has been terminated.
In addition, M.E. Holdings, Inc., a subsidiary of Investments, established to
hold Cinergy's 50% investment in Avon Holdings, entered into a $40 million
non-recourse credit agreement which will also be used to fund the acquisition
of Midlands.
Cinergy, CG&E, PSI, and ULH&P
Sale of Accounts Receivable As discussed in each registrant's 1995 Form 10-K,
in January 1996, CG&E, PSI, and ULH&P entered into an agreement to sell, on a
revolving basis, undivided percentage interests in certain of their accounts
receivable. Under the agreement, the companies have the authority to sell up
to an aggregate maximum of $350 million of which $237 million has been sold as
of March 31, 1996.
Other Commitments
Cinergy and PSI
WVPA Litigation See Note 3 of the "Notes to Financial Statements" in "Part I.
Financial Information."
RESULTS OF OPERATIONS
Cinergy, CG&E, PSI, and ULH&P
Reference is made to "ITEM 1. FINANCIAL STATEMENTS" in "PART I. Financial
Information."
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Cinergy and PSI
WVPA Litigation See Note 3 of the "Notes to Financial Statements" in "Part
I. Financial Information."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Cinergy
(a) The annual meeting of shareholders of Cinergy was held April 26, 1996,
in Cincinnati, Ohio.
(c) At the meeting, six Class II directors were elected to serve three
year terms, expiring in 1999, to the board of Cinergy, as set forth
below:
Votes Votes
Class II For Withheld
Melvin Perelman Ph.D. 134,013,381 3,681,371
Thomas E. Petry 134,120,798 3,573,954
Jackson H. Randolph 133,871,653 3,823,099
Philip R. Sharp Ph.D. 133,272,214 4,422,538
Van P. Smith 133,998,850 3,695,902
Dudley S. Taft 134,144,847 3,549,905
Additionally, the Plan was adopted. The Plan will provide Cinergy greater
flexibility to design long-term compensation incentives for its officers
and other key employees by rewarding long-term performance. Accordingly,
certain key employees may be granted Stock Options, Stock Appreciation
Rights, Restricted Stock, Cash Awards, Performance Shares, Performance
Awards, Dividend Equivalents, and Other Stock-Based Awards as described in
the Plan. There were 117,406,962 common shares voted for the proposal,
17,970,427 voted against the proposal, 2,316,163 abstentions, and 1,200
broker non-votes.
Also at the meeting, an amendment to the Cinergy Annual Incentive Plan was
approved. The amendment changes the maximum dollar amount of compensation
that can be paid to a "covered employee" under the plan to $1 million. The
amendment also adds "total shareholder return" as an example of objective
performance criteria which can constitute corporate goals under the plan.
There were 128,219,715 common shares voted for the amendment, 6,874,985
voted against the amendment, 2,598,852 abstentions, and 1,200 broker non-
votes.
CG&E
(a) In lieu of the annual meeting of shareholders of CG&E, resolutions
were adopted via unanimous written consent of shareholders effective
April 25, 1996.
(b) The Board of Directors as previously reported was re-elected in its
entirety (see (c) below).
(c) The following members of the Board of Directors were unanimously re-
elected at the annual meeting:
Jackson H. Randolph
James E. Rogers
William J. Grealis
Additionally, four amendments to CG&E's Regulations were adopted as
follows:
1. The date for the annual meeting of shareholders may be the business day
next preceding Cinergy's annual meeting of shareholders.
2. A new section is added allowing a written consent of shareholders in lieu
of an annual meeting.
3. A new section is added allowing actions of the Board of Directors to be
by written consent.
4. The requirement of an operations report to be submitted to the
shareholders at the annual meeting is deleted.
PSI
(a) The annual meeting of shareholders of PSI was held in Cincinnati, Ohio
on April 26, 1996.
(b) Proxies were not solicited for the annual meeting, at which the Board
of Directors was re-elected in its entirety.
(c) The following members of the Board of Directors were unanimously re-
elected at the annual meeting:
James K. Baker
Michael G. Browning
John A. Hillenbrand II
John M. Mutz
Jackson H. Randolph
James E. Rogers
Van P. Smith
ULH&P
Omitted pursuant to Instruction H(2)(b).
ITEM 5. OTHER INFORMATION
Refer to the "Recent Developments" section in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in "Part I.
Financial Information" for information concerning contract negotiations
between PSI and IBEW Local 1393 and the Cinergy Joint Venture.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed herewith:
Exhibit
Designation Nature of Exhibit
CG&E
3-a Regulations of CG&E as amended, adopted April 25,
1996.
<PAGE>
Exhibit
Designation Nature of Exhibit
ULH&P
3-b By-laws of ULH&P as amended, adopted May 8, 1996.
Cinergy, CG&E, PSI, and ULH&P
27 Financial Data Schedules (included in
electronic submission only).
Cinergy
(b) The following report on Form 8-K was filed prior to the filing of this
Form 10-Q for the quarter ended March 31, 1996:
Date of Report Item Filed______________________
May 7, 1996 Item 5. Other Events
<PAGE>
SIGNATURES
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although Cinergy, CG&E, PSI, and ULH&P believe that the
disclosures are adequate to make the information presented not misleading. In
the opinion of Cinergy, CG&E, PSI, and ULH&P, these statements reflect all
adjustments (which include only normal, recurring adjustments) necessary to
reflect the results of operations for the respective periods. The unaudited
statements are subject to such adjustments as the annual audit by independent
public accountants may disclose to be necessary.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrants have duly caused this report to be signed by an
officer and the chief accounting officer on their behalf by the undersigned
thereunto duly authorized.
CINERGY CORP.
THE CINCINNATI GAS & ELECTRIC COMPANY
PSI ENERGY, INC.
THE UNION LIGHT, HEAT AND POWER COMPANY
Registrants
Date: May 14, 1996 J. Wayne Leonard
Duly Authorized Officer
Date: May 14, 1996 Charles J. Winger
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
"CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND
CONSOLIDATED " STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<PERIOD-TYPE> 3-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 243,678
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 33,507
<TOTAL-DEFERRED-CHARGES> 7,771
<OTHER-ASSETS> 4,338
<TOTAL-ASSETS> 289,294
<COMMON> 8,780
<CAPITAL-SURPLUS-PAID-IN> 18,839
<RETAINED-EARNINGS> 91,119
<TOTAL-COMMON-STOCKHOLDERS-EQ> 118,738
0
0
<LONG-TERM-DEBT-NET> 44,582
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 115,974
<TOT-CAPITALIZATION-AND-LIAB> 289,294
<GROSS-OPERATING-REVENUE> 86,391
<INCOME-TAX-EXPENSE> 5,511
<OTHER-OPERATING-EXPENSES> 70,989
<TOTAL-OPERATING-EXPENSES> 76,500
<OPERATING-INCOME-LOSS> 9,891
<OTHER-INCOME-NET> (244)
<INCOME-BEFORE-INTEREST-EXPEN> 9,647
<TOTAL-INTEREST-EXPENSE> 1,391
<NET-INCOME> 8,256
0
<EARNINGS-AVAILABLE-FOR-COMM> 8,256
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 1,294
<CASH-FLOW-OPERATIONS> 26,908
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
BY-LAWS
OF
THE UNION LIGHT, HEAT AND POWER COMPANY
ARTICLE I
Offices
Section 1. Offices. The registered office of the Corporation
shall be located in the City of Covington, Kenton County,
Commonwealth of Kentucky. The Corporation may establish branch
offices and conduct and carry on business at such other places
within or without the Commonwealth of Kentucky as the Board of
Directors may from time to time fix or designate, and any business
conducted or carried on at such other place or places shall be as
binding and effectual as if transacted at the registered office of
the Corporation.
ARTICLE II
Shareholders' Meetings
Section 1. Annual Meeting. The annual meeting of the
shareholders may be held either within or without the Commonwealth
of Kentucky, at such place, time, and date designated by the Board
of Directors, for the election of directors, the consideration of
the reports to be laid before the meeting and the transaction of
such other business as may be brought before the meeting.
Section 2. Notice of Annual Meeting. Notice of the annual
meeting shall be given in writing to each shareholder entitled to
vote thereat, at such address as appears on the records of the
Corporation at least ten (10) days, and not more than forty (40)
days prior to the meeting.
Section 3. Special Meetings. Special meetings of the
shareholders may be called at any time by the Chairman, Vice
Chairman, Chief Executive Officer, Chief Operating Officer, or
President, or by a majority of the members of the Board of
Directors acting with or without a meeting, or by the persons who
hold in the aggregate one-fifth of all the shares outstanding and
entitled to vote thereat, upon notice in writing, stating the time,
place and purpose of the meeting. Business transacted at all
special meetings shall be confined to the objects stated in the
call.
Section 4. Notice of Special Meeting. Notice of a special
meeting, in writing, stating the time, place and purpose thereof,
shall be given to each shareholder entitled to vote
thereat, not less than ten (10) nor more than thirty-five (35) days
after the receipt of said request.
Section 5. Waiver of Notice. Notice of any shareholders'
meeting may be waived in writing by any shareholder at any time
before or after the meeting.
Section 6. Quorum. At any meeting of the shareholders, the
holders of a majority of the shares of stock of the Corporation,
issued and outstanding, and entitled to vote, present in person or
by proxy, shall constitute a quorum for all purposes, unless
otherwise specified by law or the Articles of Incorporation.
If, however, such majority shall not be present or represented
at any meeting of the shareholders, the shareholders entitled to
vote, present in person or by proxy, shall have power to adjourn
the meeting from time to time without further notice, other than by
announcement at the meeting, until the requisite amount of voting
stock shall be present. At any such adjourned meeting, at which a
quorum shall be present, any business may be transacted which might
have been transacted at the meeting as originally called.
Section 7. Voting. At any meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote in
person, or by proxy appointed by an instrument in writing
subscribed by such shareholder and bearing a date not more than
eleven (11) months prior to said meeting, unless some other
definite period of validity shall be expressly provided therein.
Each shareholder shall have one (1) vote for each share of
stock having voting power, registered in his or her name on the
books of the Corporation, at the date fixed for determination of
persons entitled to vote at the meeting or, if no date has been
fixed, then at the date of the meeting. Cumulative voting shall be
permitted only as expressly required by statute.
A complete list of shareholders entitled to vote at the
shareholders' meetings, arranged in alphabetical order, with the
address and the number of voting shares held by each, shall be
produced on the request of any shareholder, and such list shall be
prima facie evidence of the ownership of shares and of the right of
shareholders to vote, when certified by the Secretary or by the
agent of the Corporation having charge of the transfer of shares.
Section 8. Written Consent of Shareholders in Lieu of
Meeting. Any action required or permitted by statute, the
Restated Articles of Incorporation of the Corporation, or these
By-Laws, to be taken at any annual or special meeting of
shareholders of the Corporation, may be taken without a meeting,
without prior notice, and without a vote, if a written consent in
lieu of a meeting, setting forth the actions so taken, shall be
signed by all the shareholders entitled to vote thereon. Any
such written consent may be given by one or any number of
substantially concurrent written instruments of substantially
similar tenor signed by such shareholders, in person or by
attorney or proxy duly appointed in writing, and filed with the
records of the Corporation. Any such written consent shall be
effective as of the effective date thereof as specified therein.
ARTICLE III
Board of Directors
Section 1. Number of Directors, Tenure, Vacancies. The
business and affairs of the Corporation shall be managed and
controlled by a Board of seven (7) Directors, who need not be
shareholders. Directors shall be elected annually by the
shareholders at the annual meeting, and each director shall hold
office until his successor shall have been elected and qualified.
Any director may resign at any time. Vacancies occurring in the
Board of Directors shall be filled by the remaining members of the
board. A director thus elected to fill any vacancy shall hold
office for the unexpired term of his predecessor and until his
successor is elected and qualifies. Any director may be removed at
any time by the affirmative vote of a majority of the stock then
issued and entitled to vote at a special meeting of shareholders
called for the purpose.
Section 2. Annual Organization Meeting. Immediately after
each annual election, the newly-elected directors may meet
forthwith (either within or without the State of Kentucky) for the
purpose of organization, the election of officers and the
transaction of other business. If a majority of the directors be
then present no prior notice of such meeting shall be required to
be given. The place and time of such first meeting may, however,
be fixed by written consent of all the directors, or by three (3)
days written notice given by the Secretary of the Corporation.
Section 3. Regular Meetings. Regular meetings of the Board
of Directors may be held at such time and place (either within or
without the State of Kentucky), and upon such notice, as the Board
of Directors may from time to time determine.
Section 4. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman, Vice Chairman, Chief
Executive Officer, Chief Operating Officer, or President, or may be
called by the written request of two (2) members of the Board of
Directors.
Section 5. Notice of Meetings. Notice of meetings shall be
given to each director in accordance with Article X, Section 1, of
these By-Laws.
Section 6. Quorum. A majority of the Board of Directors
shall constitute a quorum for the transaction of business, but a
majority of those present at the time and place of any meeting,
although less than a quorum, may adjourn the same from time to
time, without notice, until a quorum be had. The act of a majority
of the directors present at any such meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 7. Compensation of Directors. Each director of the
Corporation (other than directors who are salaried officers of the
Corporation or of The Cincinnati Gas & Electric Company or any of
its affiliates) shall be entitled to receive as compensation for
services such amounts as may be determined from time to time by the
Board of Directors in form either in fees for attendance at the
meeting of the Board of Directors, or by payment at the rate of a
fixed sum per month, or both. The same payment may also be made to
anyone other than a director officially called to attend any such
meeting.
Section 8. Executive Committee. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate
annually three (3) of their number to constitute an Executive
Committee, who to the extent provided in the resolution, shall
exercise in the intervals between the meetings of the Board of
Directors the powers of the Board in the management of the business
and affairs of the Corporation.
The Executive Committee may act by a majority of its members
at a meeting or by a writing signed by all of its members.
All action by the Executive Committee shall be reported to the
Board of Directors at its meeting next succeeding such action.
Non-employee members of such Executive Committee shall be
entitled to receive such fees and compensation as the Board of
Directors may determine.
Section 9. Other Committees. The Board of Directors may also
appoint such other standing or temporary committees from time to
time as they may see fit, delegating to such committees all or any
part of their own powers. The members of such committees shall be
entitled to receive such fees as the Board may determine.
Section 10. Actions of Board. Unless otherwise provided by
the Restated Articles of Incorporation of this corporation or
these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors of the Corporation, or of
any committee(s) thereof, may be taken without a meeting, if all
the members of the Board of Directors, or of such committee(s),
as the case may be, consent thereto in writing, and such
writing(s) are filed with the minutes of proceedings of the Board
of Directors, or of such committee(s), of the Corporation. Any
such written consent to action of the Board of Directors, or of
such committee(s), shall be effectuated by the signature of the
member lastly consenting thereto in writing, unless the consent
otherwise specifies a prior or subsequent effective date.
ARTICLE IV
Officers
Section 1. Officers. The officers of the Corporation shall
consist of a Chairman of the Board, a Chief Executive Officer, a
President, a Secretary, a Treasurer, a Comptroller, and may consist
of a Vice Chairman, a Chief Operating Officer, one or more Vice
Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, or one or more Assistant Comptrollers, all of
whom shall be elected by the Board of Directors, and shall hold
office for one year and until their successors are chosen and
qualified.
Any two or more offices may be held by the same person, except
that the duties of the President and Secretary shall not be
performed by the same person. All vacancies occurring among any of
the above offices shall be filled by the Board of Directors. Any
officer may be removed with or without cause by the affirmative
vote of a majority of the number of Directors at any meeting of the
Board of Directors.
Section 2. Subordinate Officers. The Board of Directors may
appoint such other officers and agents with such powers and duties
as they shall deem necessary.
Section 3. The Chairman of the Board. The Chairman of the
Board shall be a director and shall preside at all meetings of the
Board of Directors and, in the absence or inability to act of the
Chief Executive Officer, meetings of shareholders and shall,
subject to the Board's direction and control, be the Board's
representative and medium of communication, and shall perform such
other duties as may from time to time be assigned to the Chairman
of the Board by the Board of Directors. The Chairman of the Board
shall direct the long-term strategic planning process of the
Corporation and shall also lend his or her expertise to such other
officers as may be requested from time to time by such officers.
The Chairman shall be a member of the Executive Committee.
Section 4. The Vice Chairman. The Vice Chairman of the
Board, if there be one, shall be a director and shall preside at
meetings of the Board of Directors in the absence or inability to
act of the Chairman of the Board or meetings of shareholders in the
absence or inability to act of the Chief Executive Officer and the
Chairman of the Board. The Vice Chairman shall perform such other
duties as may from time to time be assigned to him or her by the
Board of Directors. The Vice Chairman shall be a member of the
Executive Committee.
Section 5. The Chief Executive Officer. The Chief Executive
Officer shall be a director and shall preside at all meetings of
the shareholders, and, in the absence or inability to act of the
Chairman of the Board and the Vice Chairman, at all meetings of the
Board of Directors. The Chief Executive Officer shall from time to
time report to the Board of Directors all matters within his or her
knowledge which the interests of the Corporation may require be
brought to their notice. The Chief Executive Officer shall be the
chairman of the Executive Committee and ex officio a member of all
standing committees.
Section 6. The Chief Operating Officer. The Chief Operating
Officer of the Corporation, if there be one, shall have general and
active management and direction of the affairs of the Corporation,
shall have supervision of all departments and of all officers of
the Corporation, shall see that the orders and resolutions of the
Board of Directors and of the Executive Committee are carried into
effect, and shall have the general powers and duties of supervision
and management usually vested in the office of a Chief Operating
Officer of a corporation. Unless otherwise provided, all corporate
officers and functions shall report directly to the Chief Operating
Officer, if there be one, or, if not, to the Chief Executive
Officer.
Section 7. The President. The President shall have such
duties as may be delegated by the Board of Directors, Chief
Executive Officer or Chief Operating Officer.
Section 8. The Vice Presidents. The Vice Presidents shall
perform such duties as the Board of Directors shall, from time to
time, require. In the absence or incapacity of the President, the
Vice President designated by the Board of Directors or Executive
Committee, Chief Executive Officer, Chief Operating Officer, or
President shall exercise the powers and duties of the President.
Section 9(a). The Secretary. The Secretary shall attend all
meetings of the Board of Directors, of the Executive Committee and
of the shareholders and act as clerk thereof and record all votes
and the minutes of all proceedings in a book to be kept for that
purpose, and shall perform like duties for the standing committees
when required.
The Secretary shall keep in safe custody the seal of the
Corporation, and, whenever authorized by the Board of Directors or
the Executive Committee, affix the seal to any instrument requiring
the same.
The Secretary shall see that proper notice is given of all
meetings of the shareholders of the Corporation and of the Board of
Directors and shall perform such other duties as may be prescribed
from time to time by the Board of Directors, Chief Executive
Officer, Chief Operating Officer or President.
(b) Assistant Secretaries. At the request of the Secretary,
or in his or her absence or inability to act, the Assistant
Secretary or, if there be more than one, the Assistant Secretary
designated by the Secretary, shall perform the duties of the
Secretary and when so acting shall have all the powers of and be
subject to all the restrictions of the Secretary. The Assistant
Secretaries shall perform such other duties as may from time to
time be assigned to them by the Board of Directors, Chief Executive
Officer, Chief Operating Officer, President, or Secretary.
Section 10(a). The Treasurer. The Treasurer shall be the
financial officer of the Corporation, shall keep full and accurate
accounts of all collections, receipts and disbursements in books
belonging to the Corporation, shall deposit all moneys and other
valuables in the name and to the credit of the Corporation, in such
depositories as may be directed by the Board of Directors, shall
disburse the funds of the Corporation as may be ordered by the
Board of Directors, Chief Executive Officer, Chief Operating
Officer, or President, taking proper vouchers therefor, and shall
render to the Chief Executive Officer, Chief Operating Officer, or
President, and directors at all regular meetings of the Board, or
whenever they may require it, and to the annual meeting of the
shareholders, an account of all his or her transactions as
Treasurer and of the financial condition of the Corporation.
The Treasurer shall also perform such other duties as the
Board of Directors may from time to time require.
If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in a form and in a sum with surety
satisfactory to the Board of Directors for the faithful performance
of the duties of his or her office and the restoration to the
Corporation in the case of his or her death, resignation or removal
from office of all books, papers, vouchers, money and other
property of whatever kind in his or her possession belonging to the
Corporation.
(b) Assistant Treasurers. At the request of the Treasurer, or
in his or her absence or inability to act, the Assistant Treasurer
or, if there be more than one, the Assistant Treasurer designated
by the Treasurer, shall perform the duties of the Treasurer and
when so acting shall have all the powers of and be subject to all
the restrictions of the Treasurer. The Assistant Treasurers shall
perform such other duties as may from time to time be assigned to
them by the Board of Directors, Chief Executive Officer, Chief
Operating Officer, President, or Treasurer.
Section 11(a). The Comptroller. The Comptroller shall have
control over all accounts and records of the Corporation pertaining
to moneys, properties, materials and supplies. He or she shall have
executive direction over the bookkeeping and accounting departments
and shall have general supervision over the records in all other
departments pertaining to moneys, properties, materials and
supplies. He or she shall have such other powers and duties as are
incident to the office of Comptroller of a corporation and shall be
subject at all times to the direction and control of the Board of
Directors, Chief Executive Officer, Chief Operating Officer,
President and a Vice President.
(b) Assistant Comptrollers. At the request of the
Comptroller, or in his or her absence or inability to act, the
Assistant Comptroller or, if there be more than one, the Assistant
Comptroller designated by the Comptroller, shall perform the duties
of the Comptroller and when so acting shall have all the powers of
and be subject to all the restrictions of the Comptroller. The
Assistant Comptrollers shall perform such other duties as may from
time to time be assigned to them by the Board of Directors, Chief
Executive Officer, Chief Operating Officer, President, or
Comptroller.
ARTICLE V
Indemnification of Directors, Officers, Employees, and Agents
Section 1. Definitions. As used in this Article:
A. "Corporation" includes any domestic or foreign
predecessor entity of the Corporation in a merger or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
B. "Director" means an individual who is or was a Director
of the Corporation or an individual who, while a Director of the
Corporation, is or was serving at the Corporation's request as a
director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise. A Director shall be
considered to be serving an employee benefit plan at the
Corporation's request if his or her duties to the Corporation also
impose duties on, or otherwise involve services by, him or her to
the plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the
estate or personal representative of a Director.
C. "Expenses" include counsel fees.
D. "Liability" means the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan), or reasonable expenses
incurred with respect to a proceeding.
E. "Official capacity" means:
(1) When used with respect to a Director, the office of
Director in the Corporation, and
(2) When used with respect to an individual other than a
Director, as contemplated in Section 6, the office in the
Corporation held by the officer or the employment or agency
relationship undertaken by the employee or agent on behalf of the
Corporation. "Official capacity" shall not include service for any
other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
F. "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
G. "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal.
Section 2. Indemnification.
A. Except as provided in subsection (D) of this Section,
the Corporation shall indemnify an individual made a party to a
proceeding because he or she is or was a Director against liability
incurred in the proceeding if:
(1) He or she conducted himself or herself in good
faith; and
(2) He or she reasonably believed:
(a) In the case of conduct in his or her official
capacity with the Corporation, that his or her conduct was in its
best interest; and
(b) In all other cases, that his or her conduct
was at least not opposed to its best interests; and
(3) In the case of any criminal proceeding, he or she
had no reasonable cause to believe his or her conduct was unlawful.
B. A Director's conduct with respect to an employee
benefit plan for a purpose he or she reasonably believed to be in
the interests of the participants in and beneficiaries of the plan
shall be conduct that satisfies the requirement of subsection
A(2)(b) of this Section.
C. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent shall not be, of itself, determinative that the Director
did not meet the standard of conduct described in this Section.
D. The Corporation may not indemnify a Director under this
Section:
(1) In connection with a proceeding by or in the right
of the Corporation in which the Director was adjudged liable to the
Corporation; or
(2) In connection with any other proceeding charging
improper personal benefit to him or her, whether or not involving
action in his or her official capacity, in which he or she was
adjudged liable on the basis that personal benefit was improperly
received by him or her.
E. Indemnification permitted under this Section in
connection with a proceeding by or in the right of the Corporation
shall be limited to reasonable expenses incurred in connection with
the proceeding.
Section 3. Mandatory Indemnification. Unless limited by the
Articles of Incorporation, the Corporation shall indemnify a
Director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he or she was a party
because he or she is or was a Director of the Corporation against
reasonable expenses incurred by him or her in connection with the
proceeding.
Section 4. Advance for Expenses.
A. The Corporation may pay for or reimburse the reasonable
expenses incurred by a Director who is a party to a proceeding in
advance of final disposition of the proceeding if:
(1) The Director furnishes the Corporation a written
affirmation of his or her good faith belief that he or she has met
the standard of conduct described in Section 2;
(2) The Director furnishes the Corporation a written
undertaking, executed personally or on his or her behalf, to repay
the advance if it is ultimately determined that he or she did not
meet the standard of conduct; and
(3) A determination is made that the facts then known to
those making the determination would not preclude indemnification
under this article.
B. The undertaking required by subsection A(2) of this
Section shall be an unlimited general obligation of the Director
but shall not be required to be secured and may be accepted without
reference to financial ability to make repayment.
C. Determinations and authorizations of payments under
this Section shall be made in the manner specified in Section 5.
Section 5. Determination and Authorization of
Indemnification.
A. The Corporation shall not indemnify a Director under
Section 2 of this Article unless authorized in the specific case
after a determination has been made that indemnification of the
Director is permissible in the circumstances because he or she has
met the standard of conduct set forth in Section 2.
B. The determination shall be made:
(1) By the Board of Directors by majority vote of a
quorum consisting of Directors not at the time parties to the
proceeding;
(2) If a quorum cannot be obtained under subsection B(1)
of this Section, by majority vote of a committee duly designated by
the Board of Directors (in which designation Directors who are
parties may participate), consisting solely of two or more
Directors not at the time parties to the proceeding;
(3) By special legal counsel:
(a) Selected by the Board of Directors or its
committee in the manner prescribed in subsection B(1) and (2) of
this Section; or
(b) If a quorum of the Board of Directors cannot be
obtained under subsection B(1) of this Section and a committee
cannot be designated under subsection B(2) of this Section,
selected by majority vote of the full Board of Directors (in which
selection Directors who are parties may participate); or
(4) By the shareholders, but shares owned by or voted
under the control of Directors who are at the time parties to the
proceeding shall not be voted on the determination.
C. Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if
the determination is made by special legal counsel, authorization
of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under subsection B(3) of this
Section to select counsel.
Section 6. Indemnification of Officers, Employees, and
Agents. Unless the Corporation's Articles of Incorporation provide
otherwise:
A. An officer of the Corporation who is not a Director
shall be entitled to mandatory indemnification under Section 3, and
is entitled to apply for court-ordered indemnification under the
Kentucky Business Corporation Act, in each case to the same extent
as a Director;
B. The Corporation may indemnify and advance expenses
under this Article to an officer, employee, or agent of the
Corporation who is not a Director to the same extent as to a
Director; and
C. The Corporation may also indemnify and advance expenses
to an officer, employee, or agent who is not a Director to the
extent, consistent with public policy, that may be provided by the
Articles of Incorporation, By-Laws, general or specific action of
the Board of Directors, or contract.
Section 7. Insurance. The Corporation may purchase and
maintain insurance on behalf of an individual who is or was a
Director, officer, employee, or agent of the Corporation, or who,
while a Director, officer, employee, or agent of the Corporation,
is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted
against or incurred by him or her in that capacity or arising from
his or her status as a Director, officer, employee, or agent,
whether or not the Corporation would have power to indemnify him or
her against the same liability under Section 2 or Section 3.
Section 8. Application of this Article.
A. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
the By-Laws, any agreement, vote of shareholders or disinterested
Directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such
office.
B. This Article shall not limit the Corporation's power to
pay or reimburse expenses incurred by a Director in connection with
his or her appearance as a witness at a proceeding at a time when
he or she has not been made a named defendant or respondent to the
proceeding.
ARTICLE VI
Capital Stock
Section 1. Form and Execution of Certificates. The
certificates for shares of the capital stock of the Corporation
shall be of such form and content, not inconsistent with the law
and the Articles of Incorporation, as shall be approved by the
Board of Directors. The certificates shall be signed by (1) either
the Chairman, Chief Executive Officer, President or a Vice
President, and (2) any one of the following officers: Secretary or
Assistant Secretary, Treasurer or Assistant Treasurer. All
certificates shall be consecutively numbered in each class of
shares. The name and address of the person owning the shares
represented thereby, with the number of shares and the date of
issue, shall be entered on the Corporation's books.
Section 2. Transfer of Shares. Transfer of shares shall be
made upon the books of the Corporation or respective Transfer
Agents designated to transfer each class of stock, and before a new
certificate is issued the old certificates shall be surrendered for
cancellation.
Section 3. Appointment of Transfer Agents and Registrars.
The Board of Directors may appoint one or more transfer agents or
one or more registrars or both, and may require all stock
certificates to bear the signature of either or both. When any
such certificate is signed, by a transfer agent or registrar, the
signatures of the corporate officers and the corporate seal, if
any, upon such certificate may be facsimiles, engraved or printed.
In case any officer designated for the purpose, who has signed
or whose facsimile signature has been used on any such certificate,
shall, from any cause, cease to be such officer before the
certificate has been delivered by the Corporation, the certificate
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person had not ceased to be such officer.
Section 4. Closing of Transfer Books or Taking Record of
Shareholders. The Board of Directors may fix a time not exceeding
forty (40) days preceding the date of any meeting of shareholders
or any dividend payment date or any date for the allotment of
rights as a record date for the determination of the shareholders
entitled to notice of such meeting or to vote thereat or to receive
such dividends or rights as the case may be; or the Board of
Directors may close the books of the Corporation against transfer
of shares during the whole or any part of such period.
Section 5. Lost Stock Certificates. In the case of a lost
stock certificate, a new stock certificate may be issued in its
place upon proof of such loss, destruction or mutilation and upon
the giving of a satisfactory bond of indemnity to the Corporation
and/or to the transfer agent and registrar of such stock, if any,
in such sum and under such terms as the Board of Directors may
provide.
ARTICLE VII
Dividends
Section 1. Dividends. Dividends may be declared by the
Board of Directors (or the Executive Committee, if there be one and
the authority to declare dividends is delegated to the Executive
Committee by the Board of Directors) and paid in cash, shares, or
other property out of the annual net income to the Corporation or
out of its net assets in excess of its capital, computed in
accordance with the state statute and subject to the conditions and
limitations imposed by the Articles of Incorporation.
No dividends shall be paid to the holders of any class of
shares in violation of the rights of the holders of any other class
of shares.
Before payment of any dividends or making distribution of any
profits, there may be set apart out of the excess of assets
available for dividends such sum or sums as the Board of Directors
(or Executive Committee, if there be one and the authority to
declare dividends or make distributions is delegated to the
Executive Committee) from time to time in its absolute discretion
thinks proper as a reserve fund for any purpose.
ARTICLE VIII
Fiscal Year
Section 1. Fiscal Year. The fiscal year of the Corporation
shall begin on the first day of January and terminate on the
thirty-first day of December in each year.
ARTICLE IX
Contracts, Checks, Notes, etc.
Section 1. Contracts, Checks, Notes, etc. All contracts and
agreements authorized by the Board of Directors and all bonds and
notes shall, unless otherwise directed by the Board of Directors or
unless otherwise required by law, be signed by (1) either the
Chairman, Vice Chairman, Chief Executive Officer, Chief Operating
Officer, President, or a Vice President, and (2) any one of the
following officers: Secretary or Assistant Secretary, Treasurer or
Assistant Treasurer. The Board of Directors may by resolution
adopted at any meeting designate officers of the Corporation who
may in the name of the Corporation execute checks, drafts and
orders for the payment of money in its behalf and, in the
discretion of the Board of Directors, such officers may be so
authorized to sign such checks singly without necessity for
counter-signature.
ARTICLE X
Notice and Waiver of Notice
Section 1. Notice and Waiver of Notice. Any notice required
to be given by these by-laws to a Director or officer may be given
in writing, personally served or through the United States Mail, or
by telephone, telegram, cablegram or radiogram, and such notice
shall be deemed to be given at the time when the same shall be thus
transmitted. Any notice required to be given by these by-laws may
be waived by the person entitled to such notice.
ARTICLE XI
Corporate Seal
Section 1. Corporate Seal. The corporate seal of the
Corporation shall consist of a metallic stamp, circular in form,
bearing in its center the word "Seal", and on the outer edge the
name of the Corporation.
ARTICLE XII
Amendment
Section 1. Amendment. These By-Laws may be amended or
repealed at any meeting of the shareholders of the Corporation by
the affirmative vote of the holders of record of shares entitling
them to exercise a majority of the voting power on such proposal,
or, without a meeting, by the written consent of the holders of
record of shares entitling them to exercise a two-thirds majority
of the voting power on such proposal.
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THE UNION LIGHT, HEAT AND POWER COMPANY
_________
BY-LAWS
_________
ADOPTED BY SHAREHOLDERS, APRIL 27, 1948
AMENDED BY BOARD OF DIRECTORS, MAY 3, 1950
AMENDED BY SHAREHOLDERS, MAY 2, 1984
AMENDED BY SHAREHOLDERS, MAY 3, 1989
AMENDED BY SHAREHOLDERS, JUNE 16, 1995
AMENDED BY SHAREHOLDERS, MAY 8, 1996
_________________________________________________________________
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