File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1 DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
--------------------------------------------
The Cincinnati Gas & The Union Light, Heat
Electric Company and Power Company
139 East Fourth Street 139 East Fourth Street
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
(Name of company or companies filing this statement and
address of principal executive offices)
--------------------------------------------------------
CINergy Corp.
(Name of top registered holding company parent)
-----------------------------------------------
William L. Sheafer
CINergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Declaration to:
Ms. Cheryl M. Foley James R. Lance
Vice President, General Counsel Manager - Corporate Finance
and Corporate Secretary CINergy Corp.
CINergy Corp. 139 East Fourth Street
139 East Fourth Street Cincinnati, Ohio 45202
Cincinnati, Ohio 45202
<PAGE>
Item 1. Description of Proposed Transactions.
-------------------------------------
The Cincinnati Gas & Electric Company (CG&E) is a utility company
and wholly-owned subsidiary of CINergy Corp. (CINergy), a registered
holding company under the Public Utility Holding Company Act of 1935,
as amended (the Act). The Union Light, Heat and Power Company (Union
Light) is a utility company and wholly-owned subsidiary of CG&E and an
affiliate of CINergy. CG&E and Union Light are sometimes hereinafter
referred to individually as an "Operating Affiliate" and collectively
as the "Operating Affiliates." CG&E hereby requests authorization to
issue and sell, from time to time through March 31, 1996, an aggregate
principal amount not to exceed $500 million of a combination of senior
unsecured indebtedness (the Senior Debentures) and junior unsecured
subordinated indebtedness (the Junior Securities). In addition, Union
Light hereby requests the authorization of the Commission to issue and
sell, from time to time through March 31, 1997, an aggregate principal
amount not to exceed $55 million of unsecured indebtedness (the Union
Debentures). The Senior Debentures and the Union Debentures are
hereinafter referred to collectively as "the Senior Securities", and
the Senior and Junior Securities are hereinafter referred to
collectively as "the Securities".
The Operating Affiliates, in conjunction with potential
underwriters, have developed parameters under which the Securities are
to be sold. The parameters, as hereinafter discussed, are designed to
provide a reasonable allowance for potential changes in financial
market conditions between the time of Commission authorization and the
actual sale of the Securities. The parameters allow each Operating
Affiliate to sell the Securities on any day when it believes it is
prudent to do so provided the terms are within the parameters.
A. The Senior Securities
---------------------
The Operating Affiliates have several high coupon series of first
mortgage bonds that are, or will shortly become, optionally redeemable
and can be re-financed through the issuance of lower cost debt.
Potential candidates for such redemptions are:
Redemption
Price
Principal as a % of
Issuer Description Outstanding Principal \1\
------ ----------- ----------- -----------
CG&E 10-1/8% Series Due 2020 $100,000,000 107.27%
CG&E 10.20% Series Due 2020 $150,000,000 107.44%
CG&E 9.70% Series Due 2019 $100,000,000 107.13%
ULH&P 10-1/4% Series Due 6/1/20 $15,000,000 107.34%
ULH&P 10-1/4% Series Due 11/15/20 $15,000,000 107.20%
ULH&P 9.70% Series Due 2019 $20,000,000 106.98%
Proceeds from the sale of the Senior Securities will be used
directly or indirectly to refund some or all of these high-coupon debt
issues. Any balance of net proceeds from the sale of the Senior
Securities will be used for general corporate purposes. None of such
proceeds will be used by CG&E or Union Light to acquire, directly or
indirectly, an interest in an exempt wholesale generator (EWG) or foreign
utility company (FUCO) as defined in the Act.
The Senior Securities will be issued at a price no higher than
101.5% nor less than 98% of the principal amount, plus accrued interest,
if any, with underwriting commissions and agents' fees not to exceed
1.25% of the principal amount.
The Senior Securities may be issued in one or more new series for
terms not to exceed 40 years. The interest rate applicable to any
series of the Senior Securities shall not exceed the following maximum
spread over United States Treasury Notes and United States Treasury Bonds
of comparable maturities:
Maturity of Maturity of
10 Years Greater Than
Or Less 10 Years
--------------- ------------
(Basis Points)
Senior Debentures 175 225
Union Debentures 150 200
Interest on the Senior Securities will be paid on a semi-annual
basis.
B. The Junior Securities
---------------------
CG&E currently has preferred stock that is or will become optionally
redeemable. Potential candidates for redemption are:
Redemption
Balance Price Per
Description Outstanding Share
----------- ----------- -----------
Cumulative Preferred Stock, 7.44% Series $40,000,000 $101.00
Cumulative Preferred Stock, 9.15% Series $50,000,000 $106.10
Proceeds from the sale of the Junior Securities are anticipated to
be used directly or indirectly to redeem outstanding preferred stock.
Any balance of net proceeds from the sale of the Junior Securities will
be used for general corporate purposes. None of such proceeds will be
used by CG&E to acquire an interest in, directly or indirectly, an EWG or
FUCO.
CG&E believes the redemption of preferred stock with Junior
Securities will provide substantial benefits over traditional preferred
stock issuances. While CG&E expects that the Junior Securities will
carry a somewhat higher interest rate than a preferred issue, the
expected tax deductibility of interest payments on Junior Securities will
afford increased cash flow and net income, and ultimately lower customer
rates. In addition, CG&E's current preferred stock ratio is
approximately 8%, while the latest available industry average is about
6%. By refunding preferred stock with junior debt, CG&E will bring the
preferred stock component of its capital structure to a level more in
line with the utility industry.
The Junior Securities may be issued by CG&E in one or more new
series for terms not to exceed 40 years. The Junior Securities will be
issued at a price no higher than 101.5% nor less than 98% of the
principal amount, plus accrued interest, if any, at an interest rate
which results in a yield to maturity to the purchaser at the initial
offering price not in excess of 175 basis points above the yield to
maturity on United States Treasury Notes of comparable maturity for
Junior Securities with a maturity of 10 years or less, and at an interest
rate which results in a yield to maturity to the purchaser at the initial
offering price not in excess of 225 basis points above the yield to
maturity on United States Treasury Bonds of comparable maturity for
Junior Securities with a maturity of more than 10 years, with
underwriting commissions and agents' fees not to exceed 3.50% of the
principal amount of the Junior Securities.
Interest on the Junior Securities will be paid on either a monthly,
quarterly, semi-annual or annual basis, and CG&E may have the right to
defer payment of interest on its Junior Securities for up to five years
under certain situations.
B. Method of Issuance
------------------
It is difficult to determine, under present market conditions,
whether it would be more advantageous to the Operating Affiliates to sell
the Securities with a 40-year or some shorter maturity. It is in the
public interest, however, that the Operating Affiliates be afforded the
necessary flexibility to adjust their financing programs to developments
in the markets for long-term debt securities when and as they occur in
order to obtain the best possible price, interest rate and terms for its
Securities. It is proposed, therefore, that the Operating Affiliates
issue the Securities from time to time and determine at such subsequent
date(s) whether there should be more than one series, the maturity of
each series of the Securities (not in excess of 40 years) and the method
of issuance.
For each offering of the Securities, the Operating Affiliates
propose to either (a) sell the Securities to one or more underwriters
through a negotiated offering or (b) sell the Securities through a
competitive bidding process. In the event one or more series of the
Securities are sold through a negotiated offering, the terms of such
Securities will be negotiated by the Operating Affiliate(s) either with a
group of underwriters headed by managing underwriters or with one or more
underwriters, with a limited number of purchasers or with a single
purchaser for a direct sale or for a sale through agents. If one or more
series of the Securities are sold through competitive bidding, such
Securities will be sold to the bidder(s) whose proposal results in the
lowest annual cost of money, with the Operating Affiliate(s) having the
right to reject any or all bids. Each of the bidders will be required to
specify the coupon rate and the price, exclusive of accrued interest, to
be paid for the Securities. The redemption premiums with respect to the
Securities will also be established as a result of the negotiations or as
part of a competitive bidding process. After approval of the terms for
each offering by each Operating Affiliate's Board of Directors, by an
authorized committee thereof, or by persons authorized by the Operating
Affiliate's Board of Directors, it is anticipated that an underwriting
agreement setting forth the terms of the Securities of that offering
would be executed.
The authorization of the sale of the Securities consistent with the
parameters herein in no way relieves the Operating Affiliates of their
responsibility to obtain the best terms available for the structure
selected and, therefore, it is appropriate and reasonable for this
Commission to authorize the Operating Affiliates to agree to such terms
and prices consistent with said parameters.
It is expected that a new indenture would be used by each Operating
Affiliate for the respective Securities issued by that Operating
Affiliate, the form of such indenture being filed as Exhibit A hereto. A
separate supplemental indenture would be executed by the respective
Operating Affiliate covering terms of the Securities from each offering.
The indenture will provide that, unless otherwise provided in a
supplemental indenture or a Board Resolution, the Securities will be
subordinate and subject in right of payment to the prior payment in full
of all secured obligations of the respective Operating Affiliate, with
the Junior Securities being junior in such rights to the Senior
Debentures, whether outstanding as of the date of each indenture or
thereafter incurred. The Securities will have no cross-default
provisions with respect to other indebtedness of each Operating Affiliate
or between Operating Affiliates.
C. Statement Pursuant to Rule 54
-----------------------------
The Operating Affiliates do not intend at present to use the
borrowings proposed herein to finance the acquisition of an EWG or a
FUCO. If the Operating Affiliates' intention changes, an amended
Declaration will be filed requesting authorization for such use.
Under Rule 54, in determining whether to approve the issuance or
sale of a security by a registered holding company for purposes other
than the acquisition of an EWG or FUCO or other transactions by such
registered holding company or its subsidiaries other than with respect to
EWGs or FUCOs, the Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG or FUCO upon
the registered holding company system, if the conditions set forth in
Rule 53(a), (b) and (c) are satisfied. As set forth below, all
applicable conditions set forth in Rule 53(a) are and, assuming the
consummation of the transactions proposed herein, will be satisfied, and
none of the conditions set forth in Rule 53(b) exists or, as a result
thereof, will exist. The following discussion assumes the CINergy
system's existence for the dates and periods in question.
Three CINergy system companies are EWGs or FUCOs. PSI Argentina,
Inc. ("PSI Argentina") and its subsidiary, Costanera Power Corp.
("Costanera"), were determined to be EWGs by the Federal Energy
Regulatory Commission ("FERC") in Costanera Power Corp., 61 FERC Par.
61,335 (1992), and PSI Argentina, Inc., 68 FERC Par. 61,286 (1994). PSI
Energy Argentina ("Energy Argentina") is a FUCO and has filed with the
Commission a Notification of FUCO status on Form U-57. In addition to
these investments, CINergy owns a number of other companies formed to
hold investments in FUCOs and/or EWGs (CGE ECK, Inc., PSI T&D
International, Inc., PSI Yacyreta, Inc., and E P EDEGEL, Inc.), and is
seeking authorization in File No. 70-8589 to retain certain other
companies (including PSI Power Resource Development, Inc., PSI Power
Resource Operations, Inc., PSI International, Inc., and PSI Sunnyside,
Inc.) and to form additional companies to facilitate FUCO and EWG
investments. Because none of these other companies presently owns any
EWG or FUCO, they are not included in the calculations below.
Rule 53(a)(1): The average of CINergy's pro forma consolidated
retained earnings for the four consecutive quarters ended December 31,
1994 was $929 million, and CINergy's aggregate investment in EWGs and
FUCOs at December 31, 1994 was approximately $20 million, or
approximately 2% of consolidated retained earnings.
Rule 53(a)(2): CINergy will maintain books and records enabling it
to identify investments in and earnings from each EWG and FUCO in which
it directly or indirectly holds an interest. At present, CINergy does
not hold any interest in a domestic EWG; Rule 53(a)(2)(i) is therefore
inapplicable.
In accordance with Rule 53(a)(2)(ii), the books and records and
financial statements of each foreign EWG and FUCO which is a
"majority-owned subsidiary company" of CINergy are kept in conformity
with and prepared according to U.S. generally accepted accounting
principles ("GAAP"). CINergy will provide the Commission access to such
books and records and financial statements, or copies thereof, in
English, as the Commission may request.
In accordance with Rule 53(a)(2)(iii), for each foreign EWG and
FUCO in which CINergy directly or indirectly owns 50% or less of the
voting securities, CINergy will proceed in good faith, to the extent
reasonable under the circumstances, to cause each such entity's books and
records to be kept in conformity with, and the financial statements of
each such entity to be prepared according to, GAAP. If such books and
records are maintained, or such financial statements are prepared,
according to a comprehensive body of accounting principles other than
GAAP, CINergy will, upon request of the Commission, describe and quantify
each material variation from GAAP in the accounting principles, practices
and methods used to maintain such books and records and each material
variation from GAAP in the balance sheet line items and net income
reported in such financial statements, as the case may be. In addition,
CINergy will proceed in good faith, to the extent reasonable under the
circumstances, to cause access by the Commission to such books and
records and financial statements, or copies thereof, as the Commission
may request, and in any event will make available to the Commission any
such books and records that are available to CINergy.
Rule 53(a)(3): At any one time, a maximum of approximately 25
CINergy system employees have rendered services to PSI Argentina,
Costanera and Energy Argentina. Based on current staffing levels, this
represents less than 0.3% of the approximately 8,650 full-time employees
of CINergy's domestic operating utility subsidiaries. Such services have
heretofore been rendered, in part, by employees of PSI Energy in
accordance with the Commission's order in PSI Resources, Inc. et al.,
Rel. No. 35-25674, 52 SEC Docket 2533, 2534-35 (Nov. 13, 1992), and by
employees of CG&E in accordance with business practices established prior
to the formation of the CINergy system and the registration of CINergy as
a holding company under the Act. Pursuant to the Commission's October
21, 1994 order in File No. 70-8427 (Rel. No. 35-26146), CINergy's service
company subsidiary, CINergy Services, Inc., is authorized to provide
services to utility and non-utility associate companies, including those
that are EWGs or FUCOs.
Rule 53(a)(4): CINergy is simultaneously submitting a copy of this
Declaration, and will submit copies of any Rule 24 certificate required
hereunder, as well as a copy of Item 9 of CINergy's Form U5S and Exhibits
H and I thereto, to each of the public service commissions having
jurisdiction over the retail rates of CINergy's operating utility
subsidiaries at the time such documents are filed with the Commission.
Rule 53(b): The provisions of Rule 53(a) are not made inapplicable
to the authorizations herein requested by reason of the provisions of
Rule 53(b).
Rule 53(b)(1): Neither CINergy nor any subsidiary of CINergy is the
subject of any pending bankruptcy or similar proceeding.
Rule 53(b)(2): CINergy's total capital invested in utility
operations as of December 31, 1994 totaled approximately $5.9 billion,
consisting of approximately $2.8 billion in long-term and $208 million in
short-term debt of CG&E, PSI Energy and the utility subsidiaries of CG&E,
$478 million in preferred stock of CG&E and PSI Energy, and $2.4 billion
in common equity of CG&E, PSI Energy and the utility subsidiaries of
CG&E. CINergy's aggregate present investment in EWGs and FUCOs
(approximately $20 million) represents less than 0.4% of CINergy's total
capital invested in utility operations. Together with the $95 million in
additional investment authority requested by CINergy in File No. 70-8589,
CINergy's aggregate investment authority for EWGs and FUCOs
($115,000,000) would represent less than 2% of CINergy's total capital
invested in utility operations. Average consolidated retained earnings
for the four quarters ended December 31, 1994 equaled $929 million,
versus $1,053 million for the four quarters ended December 31, 1993, a
difference of approximately $124 million or 12%.
Rule 53(b)(3): For the 12 months ended December 31, 1994, CINergy
had net income of approximately $175,000 attributable to its direct or
indirect investments in EWGs and FUCOs.
Rule 53(c). Inasmuch as Rule 53(c) applies only if an applicant is
unable to satisfy the requirements of Rules 53(a) and (b), it is
inapplicable here.
Item 2. Fees, Commissions and Expenses.
-------------------------------
Estimates of expenses of each Operating Affiliate in connection with
the proposed issuance of the Securities will be set forth in the
appropriate item of that Operating Affiliate's Registration Statement
under the Securities Act of 1933, with such Registration Statements to be
filed as Exhibits C-1 and C-2 at a later date. No other fees,
commissions or expenses, other than expenses billed at cost by Cinergy
Services not to exceed $10,000, are to be paid or incurred by the
Operating Affiliates or any associate company in connection with the
proposed issuance of the Securities.
Item 3. Applicable Statutory Provisions.
--------------------------------
Sections 6(a) and 7 and Rule 54 are or may be applicable to the
proposed transactions. To the extent that any other sections of the Act
or rules thereunder may be applicable to the proposed transactions, the
Declarants hereby request an appropriate order thereunder.
Item 4. Regulatory Approval.
--------------------
The proposed issuance of the Securities was authorized by The Public
Utilities Commission of Ohio (PUCO) on March 29, 1995, in the case of
CG&E (Case No. 95-273-GE-AIS), and is pending approval by the Kentucky
Public Service Commission (KPSC) in the case of Union Light (Case No. 95-
091). A copy of the application to and order of the PUCO and a copy of
the application to the KPSC has been filed as Exhibits
D-1, D-3 and D-2, respectively, with a copy of the order from the KPSC to
be filed by amendment hereto.
If CG&E desires to issue medium-term notes, such securities will be
secured by global first mortgage bond securities, and CG&E would seek
separate authorization under the Act to issue such securities.
No other state commission (except as aforesaid) has jurisdiction
with respect to the subject transactions and no federal commission other
than the Commission has jurisdiction with respect thereto.
Item 5. Procedure.
----------
The Operating Affiliates hereby respectfully request that the
Commission issue and publish not later than April 10, 1995, the requisite
notice under Rule 23 with respect to the filing of this Declaration, and
that the Commission enter not later than May 9, 1995 an appropriate order
permitting this Declaration to become effective.
The Operating Affiliates hereby waive a recommended decision by a
hearing officer or any other responsible officer of the Commission; agree
that the Staff of the Division of Investment Management may assist in the
preparation of the Commission's decision; and request that there be no
waiting period between the issuance of the Commission's order and the
date on which it is to become effective.
Item 6. Exhibits and Financial Statements.
----------------------------------
(a) Exhibits:
A-1 Form of Indenture for Unsecured Securities (to be
filed by amendment).
A-2 Form of Supplemental Indenture for Unsecured
Securities (to be filed by amendment).
B Form of Underwriting Agreement (to be filed by
amendment).
C-1 Registration Statement of CG&E under the Securities
Act of 1933 relating to the Senior Debentures and
the Junior Securities which are the subject hereof
and all amendments and exhibits thereto
(incorporated by reference to the file number
assigned to the Registration Statement of CG&E to be
filed under the Securities Act of 1933).
C-2 Registration Statement of Union Light under the
Securities Act of 1933 relating to the Union
Debentures which are the subject hereof and all
amendments and exhibits thereto (incorporated by
reference to the file number assigned to the
Registration Statement of Union Light to be filed
under the Securities Act of 1933).
D-1 Copy of Application to The Public Utilities
Commission of Ohio (Case No. 95-273-GE-AIS).
D-2 Copy of Application to the Kentucky Public Service
Commission (Case No. 95-091).
D-3 Copy of Order of The Public Utilities Commission of
Ohio (Case No. 95-273-GE-AIS).
D-4 Copy of Order of the Kentucky Public Service
Commission (Case No. 95-091)(to be filed by
amendment).
E Not Applicable.
F Opinion of counsel (to be filed by amendment).
G Form of Notice of Proposed Transactions for
publication in Federal Register.
(b) Financial Statements:
FS-1 CG&E Unaudited Pro Forma Consolidated Balance Sheet
at December 31, 1994.
FS-2 CG&E Unaudited Pro Forma Consolidated Statement of
Income for the Twelve Months Ended December 31,
1994.
FS-3 CG&E Unaudited Pro Forma Consolidated Statement of
Changes in Retained Earnings for the Twelve Months
Ended December 31, 1994.
FS-4 CG&E Pro Forma Consolidated Journal Entries to give
effect to the issuance of up to $555 million of debt
securities and related redemption of outstanding
debt and preferred securities.
FS-5 CG&E Statement of Bondable Property Additions as of
December 31, 1994.
FS-6 Union Light Unaudited Pro Forma Balance Sheet at
December 31, 1994.
FS-7 Union Light Unaudited Pro Forma Statement of Income
for the Twelve Months Ended December 31, 1994.
FS-8 Union Light Unaudited Pro Forma Statement of Changes
in Retained Earnings for the Twelve Months Ended
December 31, 1994.
FS-9 Union Light Pro Forma Journal Entries to give effect
to the issuance of up to $55 million of debt
securities and related redemption of outstanding
debt securities.
FS-10 Union Light Statement of Bondable Property Additions
as of December 31, 1994.
FS-11 CINergy Unaudited Pro Forma Consolidated Balance
Sheet at December 31, 1994.
FS-12 CINergy Unaudited Pro Forma Consolidated Statement
of Income for the Twelve Months Ended December 31,
1994.
FS-13 CINergy Unaudited Pro Forma Consolidated Statement
of Changes in Retained Earnings for the Twelve
Months Ended December 31, 1994.
FS-14 CINergy Pro Forma Consolidated Journal Entries to
give effect to the issuance of up to $555 million of
debt securities and related redemption of
outstanding debt and preferred securities.
FS-15 Financial Data Schedule for CG&E (included in
electronic transmission only).
FS-16 Financial Data Schedule for Union Light (included in
electronic transmission only).
FS-17 Financial Data Schedule for CINergy (included in
electronic transmission only).
Item 7. Information as to Environmental Effects.
----------------------------------------
The proposed transactions relate only to financing activities of the
Operating Affiliates and do not involve a major federal action having a
significant impact on the human environment. The Operating Affiliates
are not aware of any federal agency that has prepared or is preparing an
environmental impact statement with respect to the proposed transactions.
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, as amended, the undersigned company has duly caused this
document to be signed on its behalf by the undersigned thereunto duly
authorized.
THE CINCINNATI GAS
& ELECTRIC COMPANY
By: \S\William L. Sheafer
William L. Sheafer
Treasurer
THE UNION LIGHT, HEAT
AND POWER COMPANY
By: \S\William L. Sheafer
William L. Sheafer
Treasurer
Dated: March 30, 1995
<PAGE>
FOOTNOTES
\1\ By letter to be dated March 31, 1995, CG&E and Union Light intend to
notify certain bondholders that the Companies expect to redeem
certain bonds at par through the operation of the Maintenance and
Replacement Fund provisions of the Companies' respective Indentures.
BEFORE
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of )
The Cincinnati Gas & Electric Company )
for Authority to Issue and Sell up to ) Case No. 95-273-GE-AIS
$500 Million of First Mortgage Bonds, )
Secured Medium Term Notes, Senior )
Unsecured Debt, or Junior Unsecured )
Subordinated Debt )
APPLICATION
------------
To the Honorable
The Public Utilities Commission of Ohio:
The Cincinnati Gas & Electric Company (CG&E), a public utility as
defined by the Ohio Revised Code, respectfully represents the following:
1. CG&E proposes, with the necessary consent and authority of this
Commission, to issue and sell, from time to time over a period ending
March 31, 1996, up to $500 million principal amount of first mortgage
bonds (the New Bonds), secured medium term notes (the Notes), senior
unsecured indebtedness (the Senior Debentures) or junior unsecured
subordinated indebtedness (the Subordinated Debt), or any combination
thereof. The New Bonds, the Notes, the Senior Debentures and the
Subordinated Debt are referred to collectively as "the Securities".
2. The New Bonds, the Senior Debentures and the Subordinated Debt
will be issued in one or more series for terms not to exceed 40 years.
The Notes will be issued in one or more series for terms not less than
one year and not more than 40 years.
3. Proceeds from the sale of the Securities will be used to refund
outstanding debt and preferred stock or for other general corporate
purposes, pursuant to Section 4905.40, Ohio Revised Code. It is
anticipated that the Subordinated Debt would be issued only to redeem
outstanding preferred stock.
4. CG&E proposes to either (a) sell the Securities to one or more
underwriters through a negotiated offering or (b) sell the Securities
through a competitive bidding process. In the event the Securities are
sold through a negotiated offering, the terms of each offering of the
Securities will be negotiated by CG&E either with a group of underwriters
headed by managing underwriters or with one or more underwriters, with a
limited number of purchasers or with a single purchaser for a direct sale
or for a sale through agents. If the Securities are sold through
competitive bidding, the Securities will be sold to the bidder(s) whose
proposal results in the lowest annual cost of money, with CG&E having the
right to reject any or all bids. Each of the bidders will be required to
specify the coupon rate and the price, exclusive of accrued interest, to
be paid for the Securities. After approval of the terms for each
offering by CG&E's Board of Directors, by an authorized committee thereof
or by persons authorized by CG&E's Board of Directors, it is anticipated
that an agreement setting forth the terms of the Securities would be
signed.
5. CG&E has filed a Registration Statement with the Securities and
Exchange Commission (SEC) on Form S-3 (Registration No. 33-52335) for
the registration of the New Bonds or Notes as first mortgage bonds under
the Securities Act of 1933 (the Act), to permit sales thereof from time
to time pursuant to the provisions of Rule 415 (providing for "Shelf
Registration" under the Act). The prospectus filed as part of such
Registration Statement relates to $380 million principal amount of the
New Bonds or Notes, pursuant to Rule 429 under the Act. CG&E may either
amend such Registration Statement through one or more post-effective
amendments for substantive changes from or additions to the previously
filed prospectus or may file a new registration statement on Form S-3.
No filing under the Public Utility Holding Company Act of 1935 (PUHCA) is
required with respect to the New Bonds since such securities are exempt
under Rule 52 of the PUHCA. In addition to Commission approval, SEC
approval under the PUHCA would be required to issue the Notes, the Senior
Debentures and the Subordinated Debt.
6. CG&E proposes that the Commission issue its order authorizing
the issuance and sale of the Securities prior to the time CG&E reaches
agreement with respect to the terms of the Securities.
7. CG&E, in conjunction with potential underwriters, has developed
parameters under which the Securities are to be sold. The parameters, as
set forth in Exhibit A, are designed to provide a reasonable allowance
for potential changes in financial market conditions between the time of
Commission authorization and the actual sale of the Securities. The
inclusion of the parameters within the Order would allow CG&E to sell the
Securities on any day when it believes it is prudent to do so provided
the terms are within the parameters.
8. The authorization of the sale of the Securities consistent with
the parameters herein in no way relieves CG&E of its responsibility to
obtain the best terms available for the structure selected and,
therefore, it is appropriate and reasonable for this Commission to
authorize CG&E to agree to such terms and prices consistent with said
parameters.
9. If the New Bonds or the Notes are issued, they will be issued
under and secured by the First Mortgage dated as of August 1, 1936
between CG&E and The Bank of New York, Trustee, as previously amended and
supplemented and to be supplemented by one or more supplemental
indentures. The Senior Debentures and the Subordinated Debt will be
issued under a loan agreement or similar document, or an indenture or
indentures between CG&E and one or more trustees to be named at a later
date.
10. The redemption premiums with respect to the Securities will also
be established as a result of the negotiations or as part of a
competitive bidding process.
11. As a result of the sale of the maximum amount of the Securities
and the possible redemption of outstanding obligations, CG&E's annual
long-term interest charges are expected to change. The effect of any
change in cost on revenue requirements can be determined only in rate
proceedings in which all factors relating to CG&E's revenue requirements
are taken into account according to law.
12. CG&E proposes either to credit premiums or charge discounts, if
any, and to charge the expenses to be incurred in connection with each
issue to the proper deferred accounts and amortize such amounts over the
respective lives of the Securities in equal annual amounts to current
income.
13. A balance sheet of CG&E showing its assets and liabilities as of
December 31, 1994, and an income statement of CG&E for the 12 months
ended December 31, 1994, are attached and marked Exhibit B.
WHEREFORE, The Cincinnati Gas & Electric Company requests that
this Commission issue an order finding that:
(1) Applicant is a public utility as defined in Section 4905.02,
Ohio Revised Code, and as such is subject to the
jurisdiction of this Commission.
(2) The Application is filed under provisions of
Section 4905.41, Ohio Revised Code.
(3) Applicant proposes to issue and sell, from time to time over
a period ending March 31, 1996, up to $500 million principal
amount of first mortgage bonds (the New Bonds), secured
medium term notes (the Notes), senior unsecured indebtedness
(the Senior Debentures) or junior unsecured subordinated
indebtedness (the Subordinated Debt), or any combination
thereof. The New Bonds, the Notes, the Senior Debentures
and the Subordinated Debt are referred to collectively as
"the Securities".
(4) The New Bonds, the Senior Debentures and the Subordinated
Debt will be issued in one or more series for terms not to
exceed 40 years. The Notes will be issued in one or more
series for terms not less than one year and not more than 40
years.
(5) If the New Bonds or the Notes are issued, they will be
issued under and secured by the First Mortgage dated as of
August 1, 1936 between Applicant and The Bank of New York,
Trustee, as previously amended and supplemented and to be
supplemented by one or more supplemental indentures. The
Senior Debentures and the Subordinated Debt will be issued
under a loan agreement or similar document, or an indenture
or indentures between CG&E and one or more trustees to be
named at a later date.
(6) Applicant, in conjunction with potential underwriters, has
developed parameters under which the Securities are to be
sold. The parameters, as set forth in Exhibit A to the
Application, are designed to provide a reasonable allowance
for potential changes in financial market conditions between
the time of Commission authorization and the actual sale of
the Securities. The inclusion of the parameters within this
Order would allow the Applicant to sell the Securities on
any day when it believes it is prudent to do so provided the
terms are within the parameters.
(7) The authorization of the sale of the Securities consistent
with the parameters herein in no way relieves the Applicant
of its responsibility to obtain the best terms available for
the structure selected and, therefore, it is appropriate and
reasonable for this Commission to authorize Applicant in
this Order to agree to such terms and prices consistent with
said parameters.
(8) The proceeds from the sale or sales of the Securities will
be used to refund outstanding debt and preferred stock or
for other general corporate purposes, pursuant to
Section 4905.40, Ohio Revised Code.
(9) Based on information contained in the Application and
exhibits thereto, the purpose to which the proceeds from the
issue and sale of the Securities shall be applied is
reasonably required by the Applicant to meet its present and
prospective obligations to provide utility service.
(10) The maximum amount of the Securities is just and reasonable,
and the probable cost, price to Applicant, and other terms
thereof, within the limits described above, to be determined
pursuant to arm's length negotiation or through competitive
bidding with right of refusal of any or all bids, are just
and reasonable.
(11) The issuance of the Securities and the possible redemption
of outstanding obligations are expected to change
Applicant's annual long-term interest charges. The effect
on revenue requirements resulting from issuance of the
Securities and the possible redemption of outstanding
obligations will be reflected in the determination of
required revenue in rate proceedings in which all factors
affecting rates are taken into account according to law.
(12) Applicant proposes either to credit premiums or charge
discounts, if any, and to charge expenses incurred in
connection with each issue to the proper deferred accounts
to be amortized in equal annual amounts to Current Income
over the respective lives of the Securities.
(13) The issuance and sale by Applicant of the Securities is
reasonably required and the money to be procured therefrom
is necessary for Applicant's lawful corporate purposes, and
the Commission is satisfied that consent and authority
should be granted accordingly.
and ordering that:
1. The Cincinnati Gas & Electric Company is hereby authorized to
issue and sell, from time to time over a period ending March 31, 1996, up
to $500 million principal amount of the New Bonds, the Notes, the Senior
Debentures or the Subordinated Debt, or any combination thereof, in one
or more series, and on terms consistent with the parameters set forth in
Exhibit A to the Application.
2. The New Bonds and the Notes, if issued, are to be issued under
and secured by the First Mortgage dated as of August 1, 1936 between CG&E
and The Bank of New York, Trustee, as previously amended and supplemented
and to be supplemented by one or more supplemental indentures. The
Senior Debentures and the Subordinated Debt will be issued under a loan
agreement or similar document, or an indenture or indentures between CG&E
and one or more trustees to be named at a later date.
3. When the Securities authorized by this Order are issued and
sold, The Cincinnati Gas & Electric Company shall report to this
Commission the terms and full particulars regarding each sale of
Securities or, in lieu of that, Applicant may submit a copy of each
prospectus as filed with the Securities and Exchange Commission setting
forth each sale of the Securities.
4. The cash proceeds procured from the aforesaid issuance and
sale of the Securities are to be used for the purposes specified in
Finding (8) above as provided in Section 4905.40, Ohio Revised Code.
5. Applicant is hereby authorized either to credit premiums or
charge discounts, if any, and to charge the expenses incurred in
connection with each issue to the proper deferred accounts and amortize
such amounts over the respective lives of the Securities in equal annual
amounts to current income.
6. Nothing in this Order shall be construed to imply any guaranty
or obligation as to the Securities, or the interest thereon, on the part
of the State of Ohio.
Respectfully submitted this 9th day of March 1995.
Jerome A. Vennemann, Esq. THE CINCINNATI GAS & ELECTRIC COMPANY
James B. Gainer, Esq.
P. O. Box 960
Cincinnati, Ohio 45201
and By /s/ J. Wayne Leonard
TAFT, STETTINIUS & HOLLISTER J. Wayne Leonard
Ronal R. Newbanks, Esq. Group Vice President and
Star Bank Center Chief Financial Officer
Cincinnati, Ohio 45202
By /s/ William L. Sheafer
William L. Sheafer
Treasurer
STATE OF OHIO )
COUNTY OF HAMILTON ) ss:
Personally appeared before me J. Wayne Leonard and William L.
Sheafer, who being first duly sworn, say that they are the Group Vice
President and Chief Financial Officer and the Treasurer, respectively, of
The Cincinnati Gas & Electric Company, that they did sign the foregoing
Application, and that the statements contained therein are true as they
verily believe.
Sworn to and subscribed before me this 9th day of March 1995.
(Seal)
/s/ Steven A. Niederbaumer
Steven A. Niederbaumer
Notary Public, State of Ohio
My Commission Expires October 26, 1999
<PAGE>
Exhibit A
Page 1
The Cincinnati Gas & Electric Company
Summary
Principal Amount: Up to $500 million of bonds (the New Bonds),
secured medium term notes (the Notes), senior
unsecured indebtedness (the Senior Debentures) or
junior unsecured subordinated indebtedness (the
Subordinated Debt), or any combination thereof, in
one or more series.
Maturity: Up to 40 years for the New Bonds, the Senior
Debentures and the Subordinated Debt, and not less
than one year or more than 40 years for the Notes.
Purpose: To refund outstanding obligations or for other
general corporate purposes.
Lead
Underwriters: To be named.
Underwriting
Commissions
or Agents' Fees: Not to exceed 1.25% of the principal amount for
the New Bonds, the Notes and the Senior
Debentures, and not to exceed 3.50% of the
principal amount for the Subordinated Debt.
Price to Public: No higher than 101 1/2% nor less than 98% of the
principal amount, plus accrued interest, if any.
Interest Rate: For the New Bonds and the Notes with a maturity of
10 years or less, not to exceed 125 basis points
above the yield to maturity on United States
Treasury Notes of comparable maturity at the time
of pricing.
For the New Bonds and the Notes with a maturity of
more than 10 years, not in excess of 175 basis
points above the yield to maturity on United
States Treasury Bonds of comparable maturity at
the time of pricing.
<PAGE>
Exhibit A
Page 2
The Cincinnati Gas & Electric Company
Summary
Interest Rate
(Cont'd): For the Senior Debentures and the Subordinated
Debt with a maturity of 10 years or less, not to
exceed 175 basis points above the yield to
maturity on United States Treasury Notes of
comparable maturity at the time of pricing.
For the Senior Debentures and the Subordinated
Debt with a maturity of more than 10 years, not in
excess of 225 basis points above the yield to
maturity on United States Treasury Bonds of
comparable maturity at the time of pricing.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
Page 1 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
Balance Sheet at December 31, 1994
ASSETS
<S> <C>
UTILITY PLANT
In service $ 4,998,869,247
Less -- Accumulated provisions
for depreciation 1,509,607,374
----------------
3,489,261,873
Construction work in progress 66,081,457
----------------
Net Utility Plant 3,555,343,330
----------------
OTHER PROPERTY AND INVESTMENTS
Non-utility property -- net 2,217,893
Investments in subsidiaries 129,559,816
Other 1,897,614
----------------
133,675,323
----------------
CURRENT ASSETS
Cash 160,138
Short-term investments 51,881,190
Accounts receivable, less
accumulated provision of
$8,552,224 for doubtful accounts 157,921,593
Accounts receivable from
subsidiary companies -- net 21,073,406
Accrued unbilled revenues 72,035,009
Materials, supplies and
fuel, at average cost 123,678,736
Prepayments and other current assets 141,028,446
----------------
567,778,518
----------------
OTHER ASSETS
Post-in-service carrying costs and deferred
operating expenses 148,117,487
Phase-in deferred return and depreciation 100,942,251
Amounts due from customers -- income taxes 381,367,104
Other 107,740,851
----------------
738,167,693
----------------
$ 4,994,964,864
================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
Page 2 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
Balance Sheet at December 31, 1994
LIABILITIES
<S> <C>
CAPITALIZATION
Common shareholders' equity --
Common shares, par value $8.50 per share --
Authorized -- 120,000,000 shares
Outstanding -- 89,663,086 shares $ 762,136,231
Additional paid-in capital 337,874,442
Earnings retained in the business 432,961,669
----------------
Total common shareholders' equity 1,532,972,342
----------------
Cumulative preferred shares, par value
$100 per share --
Authorized -- 6,000,000 shares
Outstanding --
4 % Series - 270,000 shares 27,000,000
4-3/4 % Series - 130,000 shares 13,000,000
7.44 % Series - 400,000 shares 40,000,000
9.15 % Series - 500,000 shares 50,000,000
7-7/8 % Series - 800,000 shares 80,000,000
7-3/8 % Series - 800,000 shares 80,000,000
----------------
Total preferred shares 290,000,000
----------------
Total shareholders' equity 1,822,972,342
----------------
Long-term debt --
First mortgage bonds
5-7/8 % Series due 1997 30,000,000
6-1/4 % Series due 1997 100,000,000
5.80 % Series due 1999 110,000,000
7-3/8 % Series due 1999 50,000,000
7-3/8 % Series due 2001 60,000,000
7-1/4 % Series due 2002 100,000,000
8-1/8 % Series due 2003 60,000,000
6.45 % Series due 2004 110,000,000
10-1/8 % Series due 2015 84,000,000
9.70 % Series due 2019 100,000,000
10-1/8 % Series due 2020 100,000,000
10.20 % Series due 2020 150,000,000
8.95 % Series due 2021 100,000,000
8-1/2 % Series due 2022 100,000,000
7.20 % Series due 2023 300,000,000
5.45 % Series A due 2024 21,400,000
5.45 % Series B due 2024 25,300,000
5.50 % Series C due 2024 48,000,000
----------------
1,648,700,000
----------------
Other long-term debt
6.50 % due 2022 12,720,663
Variable rate due 2013 16,000,000
Variable rate due 2015 84,000,000
----------------
112,720,663
----------------
Unamortized premium and discount (net) (14,102,213)
----------------
Total long-term debt 1,747,318,450
----------------
3,570,290,792
----------------
CURRENT LIABILITIES
Accounts payable 107,742,215
Preferred dividends declared 5,362,125
Accrued taxes 224,254,841
Accrued interest on debt 29,746,062
Other current and accrued liabilities 28,396,711
----------------
395,501,954
----------------
DEFERRED CREDITS AND OTHER
Deferred income taxes 721,102,244
Investment tax credits 129,790,275
Other 178,279,599
----------------
1,029,172,118
----------------
$ 4,994,964,864
================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
Page 3 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
Income Statement
Twelve Months Ended December 31, 1994
<S> <C>
OPERATING REVENUES
Electric $ 1,304,413,962
Gas 364,826,553
----------------
Total operating revenues 1,669,240,515
----------------
OPERATING EXPENSES
Gas purchased 204,078,509
Fuel used in electric production 326,108,648
Other operation 310,127,974
Maintenance 101,200,486
Provision for depreciation 161,689,401
Post-in-service deferred operating expenses -- net 3,290,292
Phase-in deferred depreciation (2,161,045)
Taxes other than income taxes 193,085,422
Income taxes 89,308,292
Deferred income taxes due to --
Liberalized depreciation -- net 39,086,048
Other (24,238,288)
Provision for investment tax credits, net of amortization (5,804,067)
----------------
Total operating expenses 1,395,771,672
----------------
OPERATING INCOME 273,468,843
----------------
OTHER INCOME AND DEDUCTIONS
Allowance for other funds used during construction 1,893,451
Phase-in deferred return 15,350,724
Income taxes (5,474,774)
Other -- net 16,364,167
----------------
Total other income and deductions 28,133,568
----------------
INCOME BEFORE INTEREST CHARGES 301,602,411
----------------
Interest charges 144,535,403
Allowance for borrowed funds used during
construction -- credit (1,687,144)
----------------
Net interest charges 142,848,259
----------------
NET INCOME 158,754,152
Preferred dividends 22,376,504
----------------
EARNINGS ON COMMON SHARES $ 136,377,648
================
</TABLE>
COMMONWEALTH OF KENTUCKY
BEFORE THE PUBLIC SERVICE COMMISSION
In the Matter of the Application )
of The Union Light, Heat and Power )
Company for Order Authorizing ) No. 95-091
Issue and Sale of up to $55,000,000 )
Principal Amount of First Mortgage )
Bonds or Unsecured Debt )
APPLICATION
------------
The petition of The Union Light, Heat and Power Company (Applicant)
respectfully shows:
(A) That the applicant is engaged in the business of furnishing gas
and/or electric service to customers in various municipalities and
unincorporated areas of Kenton, Campbell, Boone, Gallatin, Grant, and
Pendleton Counties, Kentucky.
(B) That Applicant's post office address is 107 Brent Spence Square,
Covington, Kentucky 41011 and the address of Applicant's principal
executive office is 139 East Fourth Street, Cincinnati, Ohio 45202.
(C) That pursuant to KRS 278.300 and 807 KAR 5:001 Section 11, for
authority to issue securities, notes, bonds, stocks, or other evidences
of indebtedness:
1. Description of Property, etc. (807 KAR 5:001
SECTION 11(1)(a)):
--------------------------------------------
Applicant renders electric or gas service, or both, in a territory
of about 500 square miles and having an estimated population of about
280,000. Its principal properties are electric and gas distribution
facilities. As of December 31, 1994, the original cost of its property
was $340,960,350.
2. Issue Proposed (807 KAR 5:001 SECTION 11(1)(b)):
-----------------------------------------------
Applicant proposes, with the necessary consent and authority of this
Commission, to issue and sell, from time to time over a period ending
March 31, 1997, up to $55 million principal amount of first mortgage
bonds (the New Bonds) or unsecured indebtedness (the New Notes), or any
combination thereof. The New Bonds and the New Notes are referred to
collectively as "the Securities".
The Securities will be issued in one or more series for terms not to
exceed 40 years.
Applicant proposes to either (a) sell the Securities to one or more
underwriters through a negotiated offering or (b) sell the Securities
through a competitive bidding process. In the event the Securities are
sold through a negotiated offering, the terms of each offering of the
Securities will be negotiated by Applicant either with a group of
underwriters headed by managing underwriters or with one or more
underwriters, with a limited number of purchasers or with a single
purchaser for a direct sale or for a sale through agents. If the
Securities are sold through competitive bidding, the Securities will be
sold to the bidder(s) whose proposal results in the lowest annual cost of
money, with Applicant having the right to reject any or all bids. Each
of the bidders will be required to specify the coupon rate and the price,
exclusive of accrued interest, to be paid for the Securities. After
approval of the terms for each offering by Applicant's Board of Directors
or by persons authorized by the Applicant's Board of Directors, it is
anticipated that an agreement setting forth the terms of the Securities
would be signed.
Applicant has filed a Registration Statement with the Securities and
Exchange Commission (SEC) on Form S-3 (Registration No. 33-40245) for the
registration of the New Bonds as first mortgage bonds under the
Securities Act of 1933 (the Act), to permit sales thereof from time to
time pursuant to the provisions of Rule 415 (providing for "Shelf
Registration" under the Act). The prospectus filed as part of such
Registration Statement relates to $20 million principal amount of the New
Bonds. Applicant may either amend such Registration Statement through
one or more post-effective amendments for substantive changes from or
additions to the previously filed prospectus or may file a new
registration statement on Form S-3. No filing under the Public Utility
Holding Company Act of 1935 (PUHCA) is required with respect to the New
Bonds since such securities are exempt under Rule 52 of the PUHCA. In
addition to Commission approval, SEC approval under the PUHCA would be
required to issue the New Notes.
Applicant proposes that the Commission issue its order authorizing
the issuance and sale of the Securities prior to the time Applicant
reaches agreement with respect to the terms of the Securities.
Applicant, in conjunction with potential underwriters, has developed
parameters under which the Securities are to be sold. The parameters, as
set forth in Exhibit A, are designed to provide a reasonable allowance
for potential changes in financial market conditions between the time of
Commission authorization and the actual sale of the Securities. The
inclusion of the parameters within the Order would allow Applicant to
sell the Securities on any day when it believes it is prudent to do so
provided the terms are within the parameters.
The authorization of the sale of the Securities consistent with the
parameters herein in no way relieves Applicant of its responsibility to
negotiate and obtain the best terms available for the structure selected
and, therefore, it is appropriate and reasonable for this Commission to
authorize Applicant to agree to such terms and prices consistent with
said parameters.
The New Bonds will be issued under and secured by the First Mortgage
dated as of February 1, 1949 between Applicant and The Bank of New York,
Trustee, as previously amended and supplemented and to be supplemented by
one or more supplemental indentures. The New Notes will be issued under
a loan agreement or similar document, or an indenture or indentures
between Applicant and one or more trustees to be named at a later date.
Applicant proposes either to credit premiums or charge discounts, if
any, and to charge the expenses to be incurred in connection with each
issue to the proper deferred accounts and amortize such amounts over the
respective lives of the Securities in equal annual amounts to current
income.
3. Use of Proceeds (807 KAR 5:001 SECTION 11(1)(C):
------------------------------------------------
The proceeds from the issuance of the Securities will be used to
redeem Applicant's $15 million principal amount of First Mortgage Bonds,
10-1/4% Series Due June 1, 2020, to redeem Applicant's $15 million
principal amount of First Mortgage Bonds, 10-1/4% Series Due November 15,
2020, to redeem Applicant's $20 million principal amount of First
Mortgage Bonds, 9.70% Series Due 2019, to redeem Applicant's short-term
indebtedness, for such additional expenditures as contemplated by KRS
278.300, or for other lawful corporate purposes. The issue is therefore
for a lawful object within Applicant's corporate purposes, necessary and
appropriate for and consistent with the proper performance by it of its
services to the public, will not impair its ability to perform those
services, and is reasonably necessary and appropriate for such purposes.
4. Detail of Estimated Construction Expenditures, etc.
(807 KAR 5:001 SECTION 11(1)(d)):
---------------------------------------------------
Not applicable since no specific construction projects are
contemplated at this time to be funded with the proceeds from the
issuance of the Securities.
5. Discharge of Obligations (807 KAR 5:001
SECTION 11(1)(e)):
---------------------------------------
The $15 million principal amount of First Mortgage Bonds, 10-1/4%
Series Due June 1, 2020 contemplated to be discharged with the proceeds
from the sale of the Securities was issued under and secured by the First
Mortgage dated as of February 1, 1949, as amended through the Eleventh
Supplemental Indenture dated as of June 1, 1990, between Applicant and
The Bank of New York, Trustee. The Bonds of Series Due June 1, 2020 were
sold to underwriters on June 6, 1990 for $14,799,000 (before associated
expenses of $86,186). The proceeds of the Bonds of Series Due June 1,
2020 were used to repay a portion of the Applicant's short-term
indebtedness incurred primarily in connection with its construction
program.
The $15 million principal amount of First Mortgage Bonds, 10-1/4%
Series Due November 15, 2020 contemplated to be discharged with the
proceeds from the sale of the Securities was issued under and secured by
the First Mortgage dated as of February 1, 1949, as amended through the
Twelfth Supplemental Indenture dated as of November 15, 1990, between
Applicant and The Bank of New York, Trustee. The Bonds of Series Due
November 15, 2020 were sold to underwriters on November 26, 1990 for
$14,769,750 (before associated expenses of $96,599). The proceeds of the
Bonds of Series Due November 15, 2020 were used to repay a portion of the
Applicant's short-term indebtedness incurred primarily in connection with
its construction program and to redeem, at par, Applicant's $5 million
principal amount of First Mortgage Bonds, 15-3/8% Series Due December 15,
1991.
The $20 million principal amount of First Mortgage Bonds, 9.70%
Series Due 2019 contemplated to be discharged with the proceeds from the
sale of the Securities was issued under and secured by the First Mortgage
dated as of February 1, 1949, as amended through the Tenth Supplemental
Indenture dated as of July 1, 1989, between Applicant and The Bank of New
York, Trustee. The Bonds of Series Due 2019 were sold to underwriters on
July 5, 1989 for $19,745,000 (before associated expenses of $105,478).
The proceeds of the Bonds of Series Due 2019 were used to repay the
Applicant's short-term indebtedness incurred primarily in connection with
its construction program and to retire Applicant's $6.1 million principal
amount of First Mortgage Bonds, 5% Series Due July 1, 1989.
The short-term indebtedness which may be discharged with the
proceeds from the sale of the Securities will be in the form of unsecured
bank loans or other short-term obligations, including intercompany
borrowings. Authority to issue up to $35 million of short-term unsecured
promissory notes was approved by the Federal Energy Regulatory Commission
on October 25, 1994, in Docket Nos. ES94-43-000 and ES94-43-001. The
interest rates on the loans to be repaid will be at the prevailing prime
commercial bank rate or lower at the date of each borrowing or renewal.
6. Financial Exhibit (807 KAR 5:001 SECTION 11(2)(a)
and SECTION 6):
-------------------------------------------------
Applicant is filing herewith the following exhibits, which are
incorporated herein and made a part of this application:
Exhibit
---------------- 807 KAR 5:001
Letter Page Description Section Reference
------ ---- ----------- -----------------
B Financial Exhibit 11(2)(a) and 6
B 1 Amount and kinds of stock
authorized 6(1)
B 1 Amount and kinds of stock
issued and outstanding 6(2)
B 1 Terms of preference of preferred
stock 6(3)
B 1 Brief description of each
mortgage on property of
applicant 6(4)
B 2 Amount of bonds authorized and
issued and related information 6(5)
B 2 Notes outstanding and related
information 6(6)
B 2 Other indebtedness and
related information 6(7)
B 2 Dividend information 6(8)
B 3-6 Detailed Income Statement and
Balance Sheet 6(9)
7. First Mortgage and Supplemental Indentures (807
KAR 5:001 SECTION 11(2)(b)):
Documents indicated were filed in the following proceedings,
respectively:
Case Exhibit
Document Style of Case No. No.
-------- --------------- ---- ---
First Mortgage In the Matter of the 1797 5
dated as of Application of the Union
February 1, 1949 Light, Heat and Power Company
for an Order Authorizing
Issue of Capital Stock and
First Mortgage Bonds
First Supplemental In the Matter of the 2569 4
Indenture dated as Application of The Union
of October 1, 1951 Light, Heat and Power Company
for an Order Authorizing a
ten-for-one Capital Stock
Split, Changing Par Value
from $100 to $15 per share
thereof and Transfer from
Earned Surplus Account to
Capital Stock Account the Sum
of $1,247,904.26
Second Supplemental In the Matter of the 2896 3
Indenture dated as Application of The Union
of May 1, 1954 Light, Heat and Power Company
for an Order Authorizing
Issue of Additional Capital
Stock
Third Supplemental In the Matter of the 3976 3
Indenture dated as Application of The Union
of July 1, 1959 Light, Heat and Power Company
for an Order Authorizing
Issue of Additional Capital
Stock
Fourth Supplemental In the Matter of the 5085 3
Indenture dated as Application of The Union
of July 1, 1963 Light, Heat and Power Company
for authority to issue up to
$6,000,000 of short-term bank
loans with no maturity to
exceed 25 months
Fifth Supplemental In the Matter of the 5085 4
Indenture dated as Application of The Union
of January 1, 1967 Light, Heat and Power Company
for authority to issue up to
$6,000,000 of short-term bank
loans with no maturity to
exceed 25 months
Sixth Supplemental In the Matter of the 5567 3
Indenture dated as Application of The Union
of June 1, 1970 Light, Heat and Power Company
for authority to issue up to
$5,000,000 of short-term bank
loans with no maturity to
exceed 25 months
Seventh Supplemental In the Matter of the 7270 E
Indenture dated as Application of The Union
of October 1, 1973 Light, Heat and Power Company
for Order Authorizing Issue
of $10,000,000 First Mortgage
Bonds, Series Due 2003
Eighth Supplemental In the Matter of the 8387 C
Indenture dated as Application of The Union
of December 1, 1978 Light, Heat and Power Company
for Order Authorizing Issue
of $10,000,000 First Mortgage
Bonds, Series Due 2008
Ninth Supplemental In the Matter of the 89-120 C
Indenture dated Application of The Union
as of Light, Heat and Power Company
December 15, 1981 for Order Authorizing Issue
and Sale of up to $35,000,000
Principal Amount of First
Mortgage Bonds
Tenth Supplemental In the Matter of the 90-295 C
Indenture dated as Application of The Union
of July 1, 1989 Light, Heat and Power Company
for Order Authorizing Issue
and Sale of up to $55,000,000
principal Amount First
Mortgage Bonds
Eleventh In the Matter of the 90-295 D
Supplemental Application of The Union
Indenture dated as Light, Heat and Power Company
of June 1, 1990 for Order Authorizing Issue
and Sale of up to $55,000,000
principal Amount of First
Mortgage Bonds
Twelfth Supplemental In the Matter of the 92-418 B
Indenture dated as Application of The Union
of November 15, 1990 Light, Heat and Power Company
for Order Authorizing Issue
of Capital Stock
Thirteenth In the Matter of the 92-418 C
Supplemental Application of The Union
Indenture dated as Light, Heat and Power Company
of August 1, 1992 for Order Authorizing Issue
of Capital Stock
8. Maps and Plans (807 KAR 5:001 SECTION 11(2)(c)):
-----------------------------------------------
Not applicable.
9. Articles of Incorporation (807 KAR 5:001 SECTION 8(3)):
------------------------------------------------------
A certified copy of Applicant's Restated Articles of Incorporation
previously was filed with the Commission in the Matter of an Adjustment
of Gas and Electric Rates of The Union Light, Heat and Power Company in
Case No. 6566.
WHEREFORE, Applicant asks that the Public Service Commission of the
Commonwealth of Kentucky make its order authorizing Applicant to issue up
to $55 million principal amount of its First Mortgage Bonds or unsecured
debt, for the purposes herein stated and in a manner as herein set forth,
and authorizing Applicant to charge expenses to be incurred in connection
with the issue of the Securities to the proper deferred account and to
amortize such amount over the life of the Securities in equal amounts to
Current Income.
Dated at Cincinnati, Ohio, this 9th day of March, 1995.
THE UNION LIGHT, HEAT AND POWER COMPANY
By /s/ William L. Sheafer
William L. Sheafer
Treasurer
Its Attorneys:
/s/ Jerome A. Vennemann
Jerome A. Vennemann, Esq.
James B. Gainer, Esq.
The Union Light, Heat
and Power Company
107 Brent Spence Square
Covington, Kentucky 41011
and
Taft, Stettinius & Hollister
Ronal R. Newbanks, Esq.
Star Bank Center
Cincinnati, Ohio 45202
VERIFICATION
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )
William L. Sheafer, being first duly sworn, deposes and says: that
he is Treasurer of the Applicant in the proceeding entitled as above;
that he has read the foregoing application and knows the contents
thereof; and that the same is true of his own knowledge, except as to
matters which are therein stated on information or belief, and that as to
those matters he believes them to be true.
/s/ William L. Sheafer
William L. Sheafer
Subscribed and sworn to before me, this 9th day of March, 1995.
(Seal)
/s/ Steven A. Niederbaumer
Steven A. Niederbaumer
Notary Public, State of Ohio
My Commission Expires October 26, 1999
<PAGE>
EXHIBIT A
Page 1 of 1
The Union Light, Heat and Power Company
Summary
Principal Amount: Up to $55 million of first mortgage bonds (the New
Bonds) or unsecured indebtedness (the New Notes), or
any combination thereof, in one or more series.
Maturity: Up to 40 years for the New Bonds and the New Notes.
Purpose: To refund outstanding obligations or for other
general corporate purposes.
Lead
Underwriters: To be named.
Underwriting
Commissions
or Agents' Fees: Not to exceed 1.25% of the principal amount.
Price to Public: No higher than 101 1/2% nor less than 98% of the
principal amount, plus accrued interest, if any.
Interest Rate: For securities with a maturity of 10 years or less,
not to exceed 150 basis points above the yield to
maturity on United States Treasury Notes of
comparable maturity at the time of pricing.
For securities with a maturity of more than
10 years, not in excess of 200 basis points above
the yield to maturity on United States Treasury
Bonds of comparable maturity at the time of pricing.
<PAGE>
EXHIBIT B
FINANCIAL EXHIBIT
Page 1 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
----------------------------------------
FINANCIAL EXHIBIT
December 31, 1994
807 KAR 5:001, SECTION 6
(1.) Amount and kinds of stock authorized.
1,000,000 shares of Capital Stock $15 per share par value
amounting to $15,000,000 par value.
(2.) Amount and kinds of stock issued and outstanding.
585,333 shares of Capital Stock $15 per share par value
amounting to $8,779,995 total par value plus premiums thereon
of $18,838,946.
(3.) Terms of preference of preferred stock whether cumulative or
participating, or on dividends or assets or otherwise.
There is no preferred stock authorized, issued or outstanding.
(4.) Brief description of each mortgage on property of applicant,
giving date of execution, name of mortgagor, name of mortgagee, or
trustee, amount of indebtedness authorized to be secured thereby,
and the amount of indebtedness actually secured, together with any
sinking fund provisions.
The Union Light, Heat and Power Company, as of February 1,
1949, executed its "First Mortgage" to The Bank of New York,
Trustee, as security for the issuance of First Mortgage Bonds.
As of October 1, 1951, it executed the "First Supplemental
Indenture," as of May 1, 1954, the "Second Supplemental
Indenture," as of July 1, 1959, the "Third Supplemental
Indenture," as of July 1, 1963, the "Fourth Supplemental
Indenture," as of June 1, 1970, the "Sixth Supplemental
Indenture," as of October 1, 1973, the "Seventh Supplemental
Indenture," as of December 1, 1978, the "Eighth Supplemental
Indenture," as of December 15, 1981, the "Ninth Supplemental
Indenture," as of July 1, 1989, the "Tenth Supplemental
Indenture," as of June 1, 1990, the "Eleventh Supplemental
Indenture," as of November 15, 1990, the "Twelfth Supplemental
Indenture," and as of August 1, 1992, the "Thirteenth
Supplemental Indenture," to said First Mortgage for the
issuance of additional First Mortgage Bonds. The Company
redeemed the First Mortgage Bonds issued under the First
Supplemental Indenture on October 1, 1981, the Second
Supplemental Indenture on May 1, 1984, the Third Supplemental
Indenture on July 1, 1989, the Fourth Supplemental Indenture
on July 1, 1993, the Sixth Supplemental Indenture on
September 30, 1977 and the Ninth Supplemental Indenture on
December 15, 1990. The Company also executed a "Fifth
Supplemental Indenture" as of January 1, 1967, changing certain
provisions of the Mortgage. This mortgage, as amended, in the
opinion of counsel for the Company, constitutes a direct first
lien on all the property of the Company except rents, earnings,
revenues, income or profit of the mortgaged property, cash,
accounts receivable, supplies, etc. used in or held for the
operation of the business. The aggregated principal amount of
said Bonds at any time outstanding which may be secured by said
First Mortgage presently is limited to $200,000,000. As of
December 31, 1994, the Company had issued and outstanding
$90,000,000 principal amount of First Mortgage Bonds secured
under the terms of the Mortgage Indenture, as amended. An
Improvement and Sinking Fund provision contained in the
Mortgage provides, with respect to all series of Bonds issued
prior to 1981, in general, that on or before April 30, of
each year, the Company will deposit with the Trustee an amount
in cash and/or a principal amount of bonds equal in the
aggregate to 1% of (a) the greatest aggregate principal amount
of bonds of the applicable series theretofore outstanding at
any one time less (b) the aggregate principal amount of bonds
retired by the use of money received in consideration of any
release by the Trustee; however, the Company may credit 60% of
the lesser of cost or fair value of unfunded property additions
against the amounts otherwise to be so deposited.
<PAGE>
EXHIBIT B
FINANCIAL EXHIBIT
Page 2 of 6
(5.) Amount of bonds authorized, and amount issued, giving the name of
the public utility which issued the same, describing each class
separately, and giving date of issue, face value, rate of
interest, date of maturity and how secured, together with amount
of interest paid thereon during the last fiscal year.
The First Mortgage as amended, presently limits the
principal amount of bonds which can be outstanding at any one
time to $200,000,000. The Company has outstanding First
Mortgage Bonds, all of which are secured by the First Mortgage,
as amended, of the Company to The Bank of New York, as Trustee,
as follows:
<TABLE>
<CAPTION>
Date of Principal Amount Rate of Date of Interest Paid
Indenture Issue Auth. & Issued Interest Maturity Year 1994
---------- ------- ---------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
7th Supplement 10/ 1/73 $ 10,000,000 8 % 10/ 1/03 $ 800,000
8th Supplement 12/ 1/78 10,000,000 9-1/2% 12/ 1/08 950,000
10th Supplement 7/ 1/89 20,000,000 9.70 % 7/ 1/19 1,940,000
11th Supplement 6/ 1/90 15,000,000 10-1/4% 6/ 1/20 1,537,500
12th Supplement 11/15/90 15,000,000 10-1/4% 11/15/20 1,537,500
13th Supplement 8/ 1/92 20,000,000 6-1/2% 8/ 1/99 1,300,000
----------- ----------
$90,000,000 $8,065,000
=========== ==========
</TABLE>
(6.) Each note outstanding, giving date of issue, amount, date of
maturity, rate of interest, in whose favor, together with amount
of interest paid thereon during the last fiscal year.
<TABLE>
<CAPTION>
Date of Date of Rate of Interest Paid
Payee Issue Amount Maturity Interest Year 1994
------ -------- ------ -------- --------- -------------
<S> <C> <C> <C> <C> <C>
National City 12/21/94 $1,000,000 1/ 5/95 6.25% -
PNC 12/28/94 2,000,000 1/ 6/95 6.77% -
Society 12/30/94 2,500,000 1/ 9/95 6.04% -
Society 12/30/94 2,500,000 1/11/95 6.06% -
National City 12/30/94 3,000,000 1/13/95 6.15% -
Fifth Third 12/30/94 3,500,000 1/18/95 5.87% -
</TABLE>
(7.) Other indebtedness, giving same by classes and describing
security, if any, with a brief statement of the devolution or
assumption of any portion of such indebtedness upon or by person
or corporation if the original liability has been transferred,
together with amount of interest paid thereon during the last
fiscal year.
The Company had no other indebtedness.
(8.) Rate and amount of dividends paid during the five (5) previous
fiscal years, and the amount of capital stock on which dividends
were paid each year.
<TABLE>
<CAPTION>
Dividends Paid
--------------------------- No. of Par Value
Year Ending Per Share Total Shares of Stock
----------- --------- ----- ------ ---------
<S> <C> <C> <C> <C>
December 31, 1990 $3.00 $1,455,999 485,333 $7,279,995
December 31, 1991 5.00 2,426,665 485,333 7,279,995
December 31, 1992 - - 585,333 8,779,995
December 31, 1993 5.00 2,926,665 585,333 8,779,995
December 31, 1994 6.00 3,511,998 585,333 8,779,995
</TABLE>
(9.) Detailed Income Statement and Balance Sheet.
See attached pages 3 through 6 of Financial Exhibit for
detailed income statement for the twelve months ended December
31, 1994 and detailed balance sheet as of December 31, 1994.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
FINANCIAL EXHIBIT
Page 3 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
INCOME STATEMENT
FOR THE 12 MONTHS ENDED DECEMBER 31, 1994
<S> <C>
Operating Revenues:
Electric $177,564,321
Gas 71,971,079
------------
Total operating revenues 249,535,400
------------
Operating Expenses:
Electricity purchased from parent company
for resale 134,887,413
Gas purchased 40,508,182
Other operation 31,809,220
Maintenance 5,472,881
Provision for depreciation 11,123,913
Taxes other than income taxes 4,001,686
Federal income taxes 2,791,109
State income taxes 509,099
Deferred income taxes - net 2,329,051
Investment tax credits - net (286,814)
------------
Total operating expenses 233,145,740
------------
Operating Income 16,389,660
------------
Other Income and Deductions:
Allowance for other funds used during
construction 78,015
Other income and deductions - net 292,873
------------
Total other income and deductions 370,888
------------
Income Before Interest Charges 16,760,548
------------
Interest Charges
Interest on long-term debt 8,065,000
Other interest 395,259
Amortization of debt discount, premium and other 95,608
Allowance for borrowed funds used during
construction - credit (182,525)
------------
Net interest charges 8,373,342
------------
Net Income $ 8,387,206
============
<FN>
The accompanying note is an integral part of the above statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
FINANCIAL EXHIBIT
Page 4 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
BALANCE SHEET
DECEMBER 31, 1994
ASSETS
-------
<S> <C>
Utility Plant:
Utility plant $340,960,350
Less accumulated provisions for depreciation 104,112,606
------------
Net utility plant 236,847,744
------------
Current Assets:
Cash 1,070,768
Accounts receivable, less accumulated
provision of $457,429 for doubtful accounts 23,119,812
Accrued unbilled revenues 10,772,188
Materials and supplies, at average cost
Gas stored for current use 6,215,347
Other materials and supplies 1,406,273
Property taxes applicable to subsequent year 2,200,000
Prepayments and other 593,493
------------
Total current assets 45,377,881
------------
Other Assets:
Regulatory assets - deferred merger costs 1,785,351
Other 3,117,063
------------
4,902,414
------------
$287,128,039
============
<FN>
The accompanying note is an integral part of the above statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
FINANCIAL EXHIBIT
Page 5 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
BALANCE SHEET
DECEMBER 31, 1994
LIABILITIES
-----------
<S> <C>
Shareholders' equity:
Capital shares, $15 par value -
Authorized - 1,000,000 shares
Outstanding - 585,000 shares $ 8,779,995
Premium on capital shares 18,838,946
Retained earnings 74,202,563
------------
Total shareholders' equity 101,821,504
------------
First Mortgage Bonds:
8 % series due 2003 10,000,000
9-1/2% series due 2008 10,000,000
9.70 % series due 2019 20,000,000
10-1/4% series due 2020 30,000,000
6-1/2% series due 1999 20,000,000
Unamortized premium (discount) - net (761,581)
------------
Total long-term debt 89,238,419
------------
Current Liabilities:
Notes payable - bank 14,500,000
Accounts payable 6,048,491
Accounts payable to associated companies - net 15,606,102
Accrued taxes 2,876,244
Accrued interest on debt 2,123,326
Other current and accrued liabilities 4,122,409
------------
45,276,572
------------
Deferred Credits and Other:
Deferred income taxes 23,225,536
Investment tax credits 5,364,376
Income taxes refundable through rates 4,282,159
Accrued pension and other postretirement costs 10,355,915
Other 7,563,558
------------
Total deferred credits and other 50,791,544
------------
$287,128,039
============
<FN>
The accompanying note is an integral part of the above statement.
</TABLE>
<PAGE>
EXHIBIT B
FINANCIAL EXHIBIT
Page 6 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
NOTE TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. Utility plant is stated at original cost which does not represent
its present day replacement or realizable value. The Kentucky
statutes expressly authorize the Kentucky Public Service Commission
to ascertain, for rate making purposes, the value of the property of
any public utility and provide that, in making any such valuation,
the Commission shall give due consideration to the history and
development of the utility and its property, original cost, cost of
reproduction as a going concern, and other elements of value
recognized by the law of the land for rate making purposes.
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of )
The Cincinnati Gas & Electric Company )
for Authority to Issue and Sell up to ) Case No. 95-273-GE-AIS
$500 Million of First Mortgage Bonds, )
Secured Medium Term Notes, Senior )
Unsecured Debt, or Junior Unsecured )
Subordinated Debt )
FINDING AND ORDER
The Commission finds:
(1) Applicant, an Ohio corporation, is a public utility as defined
in Section 4905.02, Revised Code, and is subject to the
jurisdiction of this Commission.
(2) The Application is filed under the provisions of Sections
4905.40 and 4905.41, Revised Code.
(3) Applicant proposes to issue and sell, through March 31, 1996,
not more than $500 million aggregate principal amount of first
mortgage bonds (the "New Bonds"), secured medium term notes
(the "Notes"), senior unsecured indebtedness (the "Senior
Debentures"), or junior unsecured subordinated indebtedness
(the "Subordinated Debt"), or any combination thereof
(collectively referred as "the Securities"), in one or more
series, consistent with the parameters as set forth in the
Application and Exhibits.
(4) The New Bonds and the Notes will be issued under and secured
by the First Mortgage Indenture dated August 1, 1936, between
Applicant and The Bank of New York, Trustee, as previously
amended and supplemented, and to be further supplemented by
one or more supplemental indentures. The Senior Debentures
and the Subordinated Debt will be issued under a loan
agreement or similar document, or an indenture or indentures,
as described in the Application.
(5) Applicant proposes to either (a) sell the Securities to one or
more underwriters through a negotiated offering, or (b) sell
the securities through a competitive bidding process, as
described in the Application.
(6) The proposed guidelines or parameters set forth in the
Application are intended to facilitate the issuance of the
Securities on the best terms possible and at the lowest cost.
The authorization of the sale of the Securities within the
parameters set forth in the Application in no way relieves the
Applicant of its responsibilities to negotiate and obtain the
best terms available.
(7) The proceeds from the issuance of the Securities will be used
to refund a portion of Applicant's outstanding debt and
preferred stock and for other general corporate purposes,
pursuant to Section 4905.40, Revised Code.
(8) The effect on the Applicant's revenue requirements resulting
from the issuance of the Securities will be reflected in the
determination of required revenue in rate proceedings in which
all factors affecting rates are taken into account according
to law.
(9) The maximum amount of the Securities, the probable cost, price
to Applicant, and other terms thereof, within the parameters
set forth in the Application and Exhibits, to be determined by
means of private arm's length negotiations or through
competitive bidding, do not appear to be unjust or
unreasonable.
(10) Based on information contained in the Application, the
exhibits thereto, and other documentary information to which
the Commission has access, the purposes to which the proceeds
from the Securities shall be applied appear to be reasonably
required by the Applicant to meet its present and prospective
obligations to provide utility service and the Commission is
satisfied that consent and authority should be granted.
It is, therefore,
ORDERED, That The Cincinnati Gas & Electric Company is authorized
to issue and sell, in one or more series, through March 31, 1996, not
more than $500 million aggregate principal amount of first mortgage
bonds, secured medium term notes, senior unsecured indebtedness or junior
unsecured subordinated indebtedness, or any combination thereof,
consistent with the parameters as set forth in the Application and
Exhibits. It is, further,
ORDERED, That Applicant is authorized to apply the net proceeds
from the sale of the Securities for the purposes set forth in this Order
and otherwise pursuant to Section 4905.40, Revised Code. It is, further,
ORDERED, That after the Securities authorized by this Order are
issued, Applicant shall report to this Commission as soon as practicable
the terms and full particulars regarding each sale of the Securities and
shall file with the Commission the executed copy of the loan agreement or
similar documents, or an indenture or indentures, as applicable. It is,
further,
ORDERED, That Applicant shall account for the issuance of the
Securities as prescribed by the Federal Energy Regulatory Commission
Uniform System of Accounts as currently in effect. It is, further,
ORDERED, That nothing in this Order shall be construed to imply
any guaranty or obligation by the Commission to assure completion of any
specific construction project of the Applicant. It is, further,
ORDERED, That nothing in this Order shall be construed to imply
any guaranty, or obligation as to the Securities, or the associated
interest, on the part of the State of Ohio. It is, further,
ORDERED, That nothing in this Order shall be deemed to be binding
upon this Commission in any future proceeding or investigation involving
the justness or reasonableness of any rate, charge, rule or regulation of
the Applicant. It is, further,
ORDERED, That a copy of this Order be served upon all parties of
record.
THE PUBLIC UTILITIES COMMISSION OF OHIO
/s/ Craig A. Glazer
Craig A. Glazer, Chairman
/s/ J. Michael Biddison /s/ Jolynn Barry Butler
J. Michael Biddison Jolynn Barry Butler
/s/ Richard M. Fanelly /s/ David W. Johnson
Richard M. Fanelly David W. Johnson
EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
April __, 1995
Notice is hereby given that the following filing(s) has/have
been made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendment(s) thereto is/are available for public
inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing
by May 8, 1995, to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the relevant applicant(s)
and/or declarant(s) at the address specified below. Proof of service (by
affidavit, or, in case of an attorney at law, by certificate) should be
filed with the request. Any request for hearing shall identify
specifically the issues of fact or law that are disputed. A person who
so requests will be notified of any hearing, if ordered, and will receive
a copy of any notice or order issued in the matter. After said date, the
application(s) and/or declaration(s), as filed or as amended, may be
granted and/or permitted to become effective.
CINergy Corp. et al. (File No. 70- )
The Cincinnati Gas & Electric Company (CG&E), a utility company
and wholly-owned subsidiary of CINergy Corp. (CINergy), a registered
holding company, and CG&E's wholly-owned subsidiary, The Union Light,
Heat and Power Company (Union Light), a utility company and an affiliate
of CINergy, all of 139 East Fourth Street, Cincinnati, Ohio 45202, have
filed an application-declaration under sections 6(a) and 7 of the Act.
CG&E seeks authorization to issue and sell from time to time through
March 31, 1996, an aggregate principal amount not to exceed $500 million
of a combination of senior unsecured indebtedness (the Senior Debentures)
and junior unsecured subordinated indebtedness (the Junior Securities).
In addition, Union Light sees authorization to issue and sell, from time
to time through March 31, 1997, an aggregate principal amount not to
exceed $55 million of unsecured indebtedness (the Union Debentures). The
Senior Debentures and the Union Debentures are hereinafter referred to
collectively as "the Senior Securities", and the Senior and Junior
Securities are hereinafter referred to collectively as "the Securities".
CG&E and Union Light are sometimes hereinafter referred to individually
as an "Operating Affiliate" and collectively as the "Operating
Affiliates."
The Operating Affiliates, in conjunction with potential
underwriters, have developed parameters under which the Securities are to
be sold. The parameters, as hereinafter discussed, are designed to
provide a reasonable allowance for potential changes in financial market
conditions between the time of Commission authorization and the actual
sale of the Securities. The parameters allow each Operating Affiliate to
sell the Securities on any day when it believes it is prudent to do so
provided the terms are within the parameters.
The Operating Affiliates have several high coupon series of first
mortgage bonds that are, or will shortly become, optionally redeemable
and can be re-financed through the issuance of lower cost debt. Proceeds
from the sale of the Senior Securities will be used directly or
indirectly to refund some or all of redeemable high-coupon debt issues.
Any balance of net proceeds from the sale of the Senior Securities will
be used for general corporate purposes. None of such proceeds will be
used by CG&E or Union Light to acquire, directly or indirectly, an
interest in an exempt wholesale generator (EWG) or foreign utility
company (FUCO) as defined in the Act.
The Senior Securities (1) will be issued at a price no higher than
101.5% nor less than 98% of the principal amount, plus accrued interest,
if any, with underwriting commissions and agents' fees not to exceed
1.25% of the principal amount, (2) may be issued in one or more new
series for terms not to exceed 40 years, and (3) will be issued at an
interest rate which results in a yield to maturity to the purchaser at
the initial offering price, depending on the maturity of the Security
issued, of up to a maximum of (a) 225 basis points for the Senior
Debentures, or (b) 200 basis points for the Union Debentures, over the
yield to maturity on United States Treasury Notes and United States
Treasury Bonds of comparable maturities. Interest on the Senior
Securities will be paid on a semi-annual basis.
CG&E currently has preferred stock that is or will become
optionally redeemable. Proceeds from the sale of the Junior Securities
are anticipated to be used directly or indirectly to redeem outstanding
preferred stock. Any balance of net proceeds from the sale of the Junior
Securities will be used for general corporate purposes. None of such
proceeds will be used by CG&E to acquire, directly or indirectly, an
interest in an EWG or FUCO as defined in the Act.
The Junior Securities (1) will be issued at a price no higher than
101.5% nor less than 98% of the principal amount, plus accrued interest,
if any, with underwriting commissions and agents' fees not to exceed
3.50% of the principal amount, (2) may be issued in one or more new
series for terms not to exceed 40 years, and (3) will be issued at an
interest rate which results in a yield to maturity to the purchaser at
the initial offering price, depending on the maturity of the Security
issued, of up to a maximum of 225 basis points over the yield to maturity
on United States Treasury Notes and United States Treasury Bonds of
comparable maturities. Interest on the Junior Securities will be paid on
either a monthly, quarterly, semi-annual or annual basis, and CG&E may
have the right to defer payment of interest on its Junior Securities for
up to five years under certain situations.
For each offering of the Securities, the Operating Affiliates
propose to either (a) sell the Securities to one or more underwriters
through a negotiated offering or (b) sell the Securities through a
competitive bidding process. In the event one or more series of the
Securities are sold through a negotiated offering, the terms of such
Securities will be negotiated by the Operating Affiliate(s) either with a
group of underwriters headed by managing underwriters or with one or more
underwriters, with a limited number of purchasers or with a single
purchaser for a direct sale or for a sale through agents. If one or more
series of the Securities are sold through competitive bidding, such
Securities will be sold to the bidder(s) whose proposal results in the
lowest annual cost of money, with the Operating Affiliate(s) having the
right to reject any or all bids. Each of the bidders will be required to
specify the coupon rate and the price, exclusive of accrued interest, to
be paid for the Securities. The redemption premiums with respect to the
Securities will also be established as a result of the negotiations or as
part of a competitive bidding process. After approval of the terms for
each offering by each Operating Affiliate's Board of Directors, by an
authorized committee thereof, or by persons authorized by the Operating
Affiliate's Board of Directors, it is anticipated that an underwriting
agreement setting forth the terms of the Securities of that offering
would be executed.
It is expected that a new indenture would be used by each
Operating Affiliate for the respective Securities issued by that
Operating Affiliate. A separate supplemental indenture would be executed
by the respective Operating Affiliate covering terms of the Securities
from each offering.
The indenture will provide that, unless otherwise provided in a
supplemental indenture or a Board Resolution, the Securities will be
subordinate and subject in right of payment to the prior payment in full
of all secured obligations of the respective Operating Affiliate, with
the Junior Securities being junior in such rights to the Senior
Debentures, whether outstanding as of the date of each indenture or
thereafter incurred. The Securities will have no cross-default
provisions with respect to other indebtedness of each Operating Affiliate
or between Operating Affiliates.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz, Secretary
<TABLE>
<CAPTION>
Exhibit FS-1
Financial Statements
Page 1 of 2
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994
ASSETS
Pro Forma
Actual Adjustments Pro Forma
------------ ----------- ------------
(dollars in thousands)
<S> <C> <C> <C>
ASSETS
UTILITY PLANT - ORIGINAL COST
In service
Electric $ 4,502,840 $ 4,502,840
Gas 645,602 645,602
Common 185,718 185,718
------------ ------------
5,334,160 5,334,160
Accumulated depreciation 1,613,505 1,613,505
------------ ------------
3,720,655 3,720,655
Construction work in progress 74,989 74,989
------------ ------------
Total utility plant 3,795,644 3,795,644
------------ ------------
CURRENT ASSETS
Cash and temporary cash investments 52,516 $ 26,409 78,925
Restricted deposits 98 98
Accounts receivable less
accumulated provision of
$8,999,410 for doubtful accounts 269,020 269,020
Materials, supplies and fuel --
at average cost
Fuel for use in electric production 42,167 42,167
Gas stored for current use 31,284 31,284
Other materials and supplies 57,864 57,864
Property taxes applicable to subsequent year 112,420 112,420
Prepayments and other 31,327 31,327
------------ ----------- ------------
596,696 26,409 623,105
------------ ----------- ------------
OTHER ASSETS
Regulatory Assets
Post-in-service carrying costs and deferred
operating expenses 155,138 155,138
Phase-in deferred return and depreciation 100,943 100,943
Deferred demand-side management costs 10,002 10,002
Amounts due from customers -- income taxes 381,380 381,380
Deferred merger costs 12,013 12,013
Unamortized costs of reacquiring debt 33,426 32,413 65,839
Other 55,987 55,987
Other 40,436 (682) 39,754
------------ ----------- ------------
789,325 31,731 821,056
------------ ----------- ------------
$ 5,181,665 $ 58,140 $ 5,239,805
============ =========== ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-1
Financial Statements
Page 2 of 2
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994
CAPITALIZATION AND LIABILITIES
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- ------------
(dollars in thousands)
<S> <C> <C> <C>
COMMON STOCK EQUITY
Common stock - $8.50 par value;
Authorized shares - 120,000,000
Outstanding shares - 89,663,086 $ 762,136 $ 762,136
Paid-in capital 337,874 $ 1,261 339,135
Retained earnings 432,962 (3,042) 429,920
------------ ------------- ------------
Total common stock equity 1,532,972 (1,781) 1,531,191
CUMULATIVE PREFERRED STOCK
Not subject to mandatory redemption 80,000 (40,000) 40,000
Subject to mandatory redemption 210,000 (50,000) 160,000
LONG-TERM DEBT 1,837,757 149,921 1,987,678
------------ ------------- ------------
Total capitalization 3,660,729 58,140 3,718,869
------------ ------------- ------------
CURRENT LIABILITIES
Notes payable 14,500 14,500
Accounts payable 120,817 120,817
Accrued taxes 227,651 227,651
Accrued interest 31,902 31,902
Other 32,658 32,658
------------ ------------
427,528 427,528
------------ ------------
OTHER LIABILITIES
Deferred income taxes 747,060 747,060
Unamortized investment tax credits 135,417 135,417
Accrued pension and other
postretirement benefit costs 102,254 102,254
Other 108,677 108,677
------------ ------------
1,093,408 1,093,408
------------ ------------- ------------
$ 5,181,665 $ 58,140 $ 5,239,805
============ ============= ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-2
Financial Statements
Page 1 of 1
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- ------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES
Electric $ 1,345,787 $ 1,345,787
Gas 442,398 442,398
------------ -----------
1,788,185 1,788,185
------------ -----------
OPERATING EXPENSES
Fuel used in electric production 325,470 325,470
Gas purchased 248,293 248,293
Purchased and exchanged power 20,932 20,932
Other operation 336,030 336,030
Maintenance 106,810 106,810
Depreciation 156,676 156,676
Post-in-service deferred
operating expenses -- net 3,290 3,290
Phase-in deferred depreciation (2,161) (2,161)
Income taxes 104,128 $ (3,167) 100,961
Taxes other than income taxes 197,381 197,381
------------ ------------- -----------
1,496,849 (3,167) 1,493,682
------------ ------------- -----------
OPERATING INCOME 291,336 3,167 294,503
------------ ------------- -----------
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds
used during construction 1,971 1,971
Phase-in deferred return 15,351 15,351
Income taxes 6,619 6,619
Other - net (6,726) (6,726)
------------ -----------
17,215 17,215
------------ ------------- -----------
INCOME BEFORE INTEREST 308,551 3,167 311,718
------------ ------------- -----------
INTEREST
Interest on long-term debt 150,386 9,049 159,435
Other interest 2,831 2,831
Allowance for borrowed funds used during
construction (2,977) (2,977)
------------ ------------- -----------
150,240 9,049 159,289
------------ ------------- -----------
NET INCOME 158,311 (5,882) 152,429
PREFERRED DIVIDEND REQUIREMENT 22,377 (7,551) 14,826
------------ ------------- -----------
INCOME APPLICABLE TO COMMON STOCK $ 135,934 $ 1,669 $ 137,603
============ ============= ===========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-3
Financial Statements
Page 1 of 1
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
------------ ---------- ----------
(dollars in thousands)
<S> <C> <C> <C>
Balance, December 31, 1993 $ 456,511 $ 456,511
Net income 158,311 $ (5,882) 152,429
Dividends on preferred stock (22,377) 7,551 (14,826)
Dividends on common stock (158,970) (158,970)
Other (513) (4,711) (5,224)
------------ ---------- ----------
Balance, December 31, 1994 $ 432,962 $ (3,042) $ 429,920
============ ========== ==========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
Exhibit FS-4
Financial Statements
Page 1 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
1) Cash $ 500,000,000
Long-term debt - Senior Debentures $ 400,000,000
Long-term debt - Junior Securities $ 100,000,000
To record the issuance and sale of $500,000,000 principal amount of
unsecured debt for The Cincinnati Gas & Electric Company (CG&E).
2) Cash $ 55,000,000
Long-term debt - Union Debentures $ 55,000,000
To record the issuance and sale of $55,000,000 principal amount of
unsecured debt by The Union Light, Heat and Power Company (Union Light).
3) Discount on long-term debt $ 8,500,000
Cash $ 8,500,000
To record the maximum issuance expenses for CG&E on unsecured debt at
1.25% of the principal amount of Senior Debentures, and 3.50% of the
principal amount for Junior Securities.
4) Discount on long-term debt $ 687,500
Cash $ 687,500
To record the maximum issuance expenses for Union Light on unsecured
debt at 1.25% of the principal amount of Union Debentures.
5) Pref. stock - Not subject to mandatory redemp. $ 40,000,000
Pref. stock - Subject to mandatory redemp. $ 50,000,000
Cash $ 90,000,000
To record CG&E's retirement of Cumulative Preferred Stock, 7.44% and
9.15% Series.
<PAGE>
Exhibit FS-4
Financial Statements
Page 2 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
6) Retained earnings $ 3,450,000
Cash $ 3,450,000
To record CG&E's charge to retained earnings for redemption premiums on
retirement of Cumulative Preferred Stock, 7.44% and 9.15% Series.
Calculations are as follows:
Redemption
Price Redemption
Balance Per Share Premium
------------- ------------- -------------
Cumulative Preferred Stock:
7.44% Series $ 40,000,000 $ 101.00 $ 400,000
9.15% Series 50,000,000 $ 106.10 3,050,000
------------- -------------
$ 90,000,000 $ 3,450,000
============= =============
7) Retained earnings $ 1,260,627
Paid-in capital $ 1,260,627
To record CG&E's write-off of issuance expense to retained earnings on
retired Cumulative Preferred Stock, 7.44% and 9.15% Series.
Calculations are as follows:
Issuance
Expense
-------------
Cumulative Preferred Stock:
7.44% Series $ 531,553
9.15% Series 729,074
-------------
$ 1,260,627
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 3 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
8) Long-term debt $ 350,000,000
Cash $ 350,000,000
To record CG&E's redemption of $100 million principal amount of First
Mortgage Bonds, 10-1/8% Series Due 2020, $150 million principal amount
of First Mortgage Bonds, 10.20% Series Due 2020, and $100 million
principal amount of First Mortgage Bonds, 9.70% Series Due 2019, by CG&E.
9) Long-term debt $ 50,000,000
Cash $ 50,000,000
To record Union Light's redemption of $15 million principal amount of
First Mortgage Bonds, 10-1/4% Series Due June 1, 2020, $15 million
principal amount of First Mortgage Bonds, 10-1/4% Series Due
November 15, 2020, and $20 million principal amount of First Mortgage
Bonds, 9.70% Series Due July 1, 2019.
<PAGE>
Exhibit FS-4
Financial Statements
Page 4 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
10)Unamortized loss on reacquired debt $ 29,402,907
Discount on long-term debt $ 3,398,247
Unamortized debt expense $ 444,660
Cash $ 25,560,000
To record CG&E's loss on redemption of $100 million principal amount of
First Mortgage Bonds, 10-1/8% Series Due 2020 at 107.27%, $150 million
principal amount of First Mortgage Bonds, 10.20% Series Due 2020 at
107.44%, and $100 million principal amount of First Mortgage Bonds,
9.70% Series Due 2019 at 107.13%.
Calculations are as follows:
10-1/8% 10.20% 9.70%
Series Due Series Due Series Due
2020 2020 2019 Total
------------- ------------- ------------- -------------
Princ. amount $ 100,000,000 $ 150,000,000 $ 100,000,000 $ 350,000,000
Discount on
long-term debt 1,089,900 1,443,900 864,447 3,398,247
Unamort. debt
expense 149,100 156,600 138,960 444,660
------------- ------------- ------------- -------------
Carrying amount $ 98,761,000 $ 148,399,500 $ 98,996,593 $ 346,157,093
============= ============= ============= =============
Redemp. price % 107.27% 107.44% 107.13%
Redemp. price $ 107,270,000 $ 161,160,000 $ 107,130,000 $ 375,560,000
Estimated loss
on redemption $ 8,509,000 $ 12,760,500 $ 8,133,407 $ 29,402,907
<PAGE>
Exhibit FS-4
Financial Statements
Page 5 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
11)Unamortized loss on reacquired debt $ 4,377,934
Discount on long-term debt $ 563,692
Unamortized debt expense $ 237,242
Cash $ 3,577,000
To record Union Light's loss on redemption of $15 million principal
amount of First Mortgage Bonds, 10-1/4% Series Due June 1, 2020 at
107.34%, $15 million principal amount of First Mortgage Bonds, 10-1/4%
Series Due November 15, 2020 at 107.20%, and $20 million principal
amount of First Mortgage Bonds, 9.70% Series Due 2019 at 106.98%.
Calculations are as follows:
10-1/4% 10-1/4% 9.70%
Series Due Series Due Series Due
June 1, 2020 Nov. 15, 2020 2019 Total
------------- -------------- ------------- -------------
Princ. amount $ 15,000,000 $ 15,000,000 $ 20,000,000 $ 50,000,000
Discount on
long-term debt 167,400 191,680 204,612 563,692
Unamort. debt
expense 72,300 80,265 84,677 237,242
------------- ------------- ------------- -------------
Carrying amount $ 14,760,300 $ 14,728,055 $ 19,710,711 $ 49,199,066
============= ============= ============= =============
Redemp. price % 107.34% 107.20% 106.98%
Redemp. price $ 16,101,000 $ 16,080,000 $ 21,396,000 $ 53,577,000
Estimated loss
on redemption $ 1,340,700 $ 1,351,945 $ 1,685,289 $ 4,377,934
<PAGE>
Exhibit FS-4
Financial Statements
Page 6 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
12)Interest on long-term debt $ 7,875,000
Cash $ 7,875,000
To record CG&E's increase in interest expense from issuing unsecured
debt and retiring first mortgage bonds.
Calculations are as follows: Assumed Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Increase
-------------------------
Senior debentures $ 400,000,000 8.50%$ 34,000,000
Junior securities $ 100,000,000 9.00% 9,000,000
-------------
Total increase 43,000,000
-------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 100,000,000 10-1/8% 10,125,000
10.20% Series Due 2020 $ 150,000,000 10.20% 15,300,000
9.70% Series Due 2019 $ 100,000,000 9.70% 9,700,000
-------------
Total decrease 35,125,000
-------------
Net increase $ 7,875,000
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 7 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
13)Cash $ 340,000
Interest on long-term debt $ 340,000
To record Union Light's decrease in interest expense from issuing
unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Assumed Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Increase
-------------------------
Union debentures $ 55,000,000 8.50%$ 4,675,000
-------------
Total increase 4,675,000
-------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 15,000,000 10-1/4% 1,537,500
November 15, 2020 $ 15,000,000 10-1/4% 1,537,500
First Mortgage Bonds, 9.70%
Series Due 2019 $ 20,000,000 9.70% 1,940,000
-------------
Total decrease 5,015,000
-------------
Net decrease $ 340,000
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 8 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
14)Amortization of debt discount $ 146,149
Discount on long-term debt $ 146,149
To record CG&E's incremental increase in amortization of debt discount
from issuing unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Maximum
Issuance Issuance
Balance Discount % Discount
------------- ------------- -------------
New Issues
----------
Senior debentures $ 400,000,000 1.25%$ 5,000,000
Junior securities $ 100,000,000 3.50% 3,500,000
-------------
$ 8,500,000
=============
Annual amortization based on an assumed
30 year amortization period $ 283,333
=============
Original
Issuance Life of Annual
Discount Issue Amortization
------------- ------------- -------------
Issues Redeemed
---------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 1,308,000 30 Years $ 43,596
10.20% Series Due 2020 $ 1,732,500 30 Years 57,756
9.70% Series Due 2019 $ 1,075,000 30 Years 35,832
-------------
$ 137,184
=============
Net increase in annual amortization $ 146,149
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 9 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
15)Amortization of debt discount $ 45
Discount on long-term debt $ 45
To record Union Light's incremental increase in amortization of debt
discount from issuing unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Maximum
Issuance Issuance
Balance Discount % Discount
------------- ------------- -------------
Union debentures $ 55,000,000 1.25%$ 687,500
=============
Annual amortization based on an assumed
30 year amortization period $ 22,917
=============
Original
Issuance Life of Annual
Discount Issue Amortization
------------- ------------- -------------
Issues Redeemed
---------------
First Mortgage Bonds
10-1/4% Series Due:
June 1, 2020 $ 201,000 30 Years $ 6,696
November 15, 2020 $ 230,250 30 Years 7,680
First Mortgage Bonds, 9.70%
Series Due 2019 $ 255,000 30 Years 8,496
-------------
$ 22,872
=============
Net increase in annual amortization $ 45
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 10 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
16)Amortization of loss on reacquired debt $ 1,189,672
Unamortized loss on reacquired debt $ 1,189,672
To record CG&E's amortization of loss on reacquired debt.
Calculations are as follows:
Loss on Assumed
Reacquired Amortization Annual
Debt Period Amortization
------------- ------------- -------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 8,509,000 25 Years $ 340,360
10.20% Series Due 2020 $ 12,760,500 25 Years 510,420
9.70% Series Due 2019 $ 8,133,407 24 Years 338,892
-------------
$ 1,189,672
=============
17)Amortization of loss on reacquired debt $ 177,926
Unamortized loss on reacquired debt $ 177,926
To record Union Light's amortization of loss on reacquired debt.
Calculations are as follows:
Loss on Assumed
Reacquired Amortization Annual
Debt Period Amortization
------------- ------------- -------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 1,340,700 25 Years $ 53,628
November 15, 2020 $ 1,351,945 25 Years 54,078
First Mortgage Bonds, 9.70%
Series Due 2019 $ 1,685,289 24 Years 70,220
-------------
$ 177,926
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 11 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
18)Cash $ 7,551,000
Preferred dividends $ 7,551,000
To record the reduction in preferred dividends from CG&E's redemption of
preferred stock.
Calculations are as follows:
Dividend Redemption
Balance Rate Premium
------------- ------------- -------------
Cumulative Preferred Stock:
7.44% Series $ 40,000,000 7.44%$ 2,976,000
9.15% Series 50,000,000 9.15% 4,575,000
------------- -------------
$ 90,000,000 $ 7,551,000
============= =============
19)Cash $ 3,223,787
Income tax expense $ 3,223,787
To record the impact on income tax expense from CG&E issuing unsecured
debt and redeeming first mortgage bonds and preferred stock.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Interest expense $ (7,875,000)
Amortization of discount on long-term debt (146,149)
Amortization of loss on reacquired debt (1,189,672)
-------------
Net impact on income $ (9,210,821)
=============
Impact on income taxes at
assumed rate of 35% $ (3,223,787)
=============
<PAGE>
Exhibit FS-4
Financial Statements
Page 12 of 12
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
20)Income tax expense $ 56,710
Cash $ 56,710
To record the impact on income tax expense from Union Light issuing
unsecured debt and redeeming first mortgage bonds.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Interest expense $ 340,000
Amortization of discount on long-term debt (45)
Amortization of loss on reacquired debt (177,926)
-------------
Net impact on income $ 162,029
=============
Impact on income taxes at
assumed rate of 35% $ 56,710
=============
NOTE (a) Loss on redemptions will be capitalized and amortized over the
shorter of (1) the remaining life of the issue redeemed, or (2)
the life of the new issue.
(b) A 30 year term for new issues has been assumed for pro-forma
statement purposes only. Actual term of new issues may be up to 40
years.
(c) Excess proceeds, if any, after redeeming securities will be used
for general and corporate purposes.
(d) For purposes of pro-forma financial statements, out-of-pocket
issuance costs have been ignored.
Exhibit FS-5
Financial Statements
Page 1 of 1
THE CINCINNATI GAS & ELECTRIC COMPANY
STATEMENT OF BONDABLE PROPERTY ADDITIONS
Balance of unbonded bondable property
through December 31, 1993 available for
issuance of bonds at March 30, 1995 $ 873,352,574
===============
NOTE: CG&E can issue first mortgage bonds in principal
amounts equal to 60% of the cost or the then fair value
to CG&E (whichever shall be less) of unbonded bondable
property. In addition, CG&E is also permitted to
issue first mortgage bonds on the basis of previously
retired bonds under the terms of its First Mortgage.
Currently, CG&E is able to issue up to $357 million of
first mortgage bonds on the basis of previously retired
bonds in addition to the amount issuable against
unbonded bondable property reported above. If the
Securities are issued as unsecured obligations,
unbonded bondable property available for issuance of
bonds will not be impacted by the proposed transaction.
<TABLE>
<CAPTION>
Exhibit FS-6
Financial Statements
Page 1 of 2
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA BALANCE SHEET AT DECEMBER 31, 1994
ASSETS
Pro Forma
Actual Adjustments Pro Forma
----------- ------------ ----------
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric $ 179,098 $ 179,098
Gas 134,103 134,103
Common 19,122 19,122
----------- ----------
332,323 332,323
Accumulated depreciation 104,113 104,113
----------- ----------
228,210 228,210
Construction work in progress 8,638 8,638
----------- ----------
Total utility plant 236,848 236,848
----------- ----------
CURRENT ASSETS
Cash and temporary cash investments 1,071 $ 1,019 2,090
Accounts receivable less
accumulated provision of
$457,429 for doubtful accounts 33,892 33,892
Materials, supplies and fuel --
at average cost
Gas stored for current use 6,216 6,216
Other materials and supplies 1,406 1,406
Property taxes applicable to subsequent year 2,200 2,200
Prepayments and other 593 593
----------- ----------- ----------
45,378 1,019 46,397
----------- ----------- ----------
OTHER ASSETS
Deferred merger costs 1,785 1,785
Other 3,117 3,962 7,079
----------- ----------- ----------
4,902 3,962 8,864
----------- ----------- ----------
$ 287,128 $ 4,981 $ 292,109
=========== =========== ==========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-9 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-6
Financial Statements
Page 2 of 2
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA BALANCE SHEET AT DECEMBER 31, 1994
CAPITALIZATION AND LIABILITIES
Pro Forma
Actual Adjustments Pro Forma
---------- ----------- ----------
(dollars in thousands)
<S> <C> <C> <C>
COMMON STOCK EQUITY
Common stock - $15.00 par value;
Authorized shares - 1,000,000
Outstanding shares - 585,333 $ 8,780 $ 8,780
Paid-in capital 18,839 18,839
Retained earnings 74,203 $ 105 74,308
---------- ----------- ----------
Total common stock equity 101,822 105 101,927
LONG-TERM DEBT 89,238 4,876 94,114
---------- ----------- ----------
Total capitalization 191,060 4,981 196,041
---------- ----------- ----------
CURRENT LIABILITIES
Notes payable 14,500 14,500
Accounts payable 21,655 21,655
Accrued taxes 2,876 2,876
Accrued interest 2,123 2,123
Other 4,123 4,123
---------- ----------
45,277 45,277
---------- ----------
OTHER LIABILITIES
Deferred income taxes 23,226 23,226
Unamortized investment tax credits 5,364 5,364
Accrued pension and other
postretirement benefit costs 10,356 10,356
Income taxes refundable through rates 4,282 4,282
Other 7,563 7,563
---------- ----------
50,791 50,791
---------- ----------- ----------
$ 287,128 $ 4,981 $ 292,109
========== =========== ==========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-9 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-7
Financial Statements
Page 1 of 1
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
---------- ----------- ---------
(in thousands, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES
Electric $ 177,564 $ 177,564
Gas 71,971 71,971
---------- ---------
249,535 249,535
---------- ---------
OPERATING EXPENSES
Electricity purchased from parent
company for resale 134,887 134,887
Gas purchased 40,508 40,508
Other operation 32,289 32,289
Maintenance 5,473 5,473
Depreciation 10,644 10,644
Income taxes 5,342 $ 57 5,399
Taxes other than income taxes 4,002 4,002
---------- ----------- ---------
233,145 57 233,202
---------- ----------- ---------
OPERATING INCOME 16,390 (57) 16,333
---------- ----------- ---------
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds
used during construction 78 78
Other - net 292 292
---------- ---------
370 370
---------- ----------- ---------
INCOME BEFORE INTEREST 16,760 (57) 16,703
---------- ----------- ---------
INTEREST
Interest on long-term debt 8,161 (162) 7,999
Other interest 395 395
Allowance for borrowed funds used during
construction (183) (183)
---------- ----------- ---------
8,373 (162) 8,211
---------- ----------- ---------
NET INCOME $ 8,387 $ 105 $ 8,492
========== =========== =========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-9 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-8
Financial Statements
Page 1 of 1
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
---------- ----------- ---------
(dollars in thousands)
<S> <C> <C> <C>
Balance, December 31, 1993 $ 69,327 $ 69,327
Net income 8,387 $ 105 8,492
Dividends on common stock (3,511) (3,511)
---------- ---------- ----------
Balance, December 31, 1994 $ 74,203 $ 105 $ 74,308
========== ========== ==========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-9 of this filing.
</TABLE>
Exhibit FS-9
Financial Statements
Page 1 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
1) Cash $ 55,000,000
Long-term debt - Union Debentures $ 55,000,000
To record the issuance and sale of $55,000,000 principal amount of
unsecured debt by The Union Light, Heat and Power Company (Union Light).
2) Discount on long-term debt $ 687,500
Cash $ 687,500
To record the maximum issuance expenses for Union Light on unsecured
debt at 1.25% of the principal amount of Union Debentures.
3) Long-term debt $ 50,000,000
Cash $ 50,000,000
To record Union Light's redemption of $15 million principal amount of
First Mortgage Bonds, 10-1/4% Series Due June 1, 2020, $15 million
principal amount of First Mortgage Bonds, 10-1/4% Series Due
November 15, 2020, and $20 million principal amount of First Mortgage
Bonds, 9.70% Series Due July 1, 2019.
<PAGE>
Exhibit FS-9
Financial Statements
Page 2 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
4) Unamortized loss on reacquired debt $ 4,377,934
Discount on long-term debt $ 563,692
Unamortized debt expense $ 237,242
Cash $ 3,577,000
To record Union Light's loss on redemption of $15 million principal
amount of First Mortgage Bonds, 10-1/4% Series Due June 1, 2020 at
107.34%, $15 million principal amount of First Mortgage Bonds, 10-1/4%
Series Due November 15, 2020 at 107.20%, and $20 million principal
amount of First Mortgage Bonds, 9.70% Series Due 2019 at 106.98%.
Calculations are as follows:
10-1/4% 10-1/4% 9.70%
Series Due Series Due Series Due
June 1, 2020 Nov. 15, 2020 2019 Total
------------- -------------- ------------- -------------
Princ. amount $ 15,000,000 $ 15,000,000 $ 20,000,000 $ 50,000,000
Discount on
long-term debt 167,400 191,680 204,612 563,692
Unamort. debt
expense 72,300 80,265 84,677 237,242
------------- ------------- ------------- -------------
Carrying amount $ 14,760,300 $ 14,728,055 $ 19,710,711 $ 49,199,066
============= ============= ============= =============
Redemp. price % 107.34% 107.20% 106.98%
Redemp. price $ 16,101,000 $ 16,080,000 $ 21,396,000 $ 53,577,000
Estimated loss
on redemption $ 1,340,700 $ 1,351,945 $ 1,685,289 $ 4,377,934
<PAGE>
Exhibit FS-9
Financial Statements
Page 3 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
5) Cash $ 340,000
Interest on long-term debt $ 340,000
To record Union Light's decrease in interest expense from issuing
unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Assumed Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Increase
-------------------------
Union Debentures $ 55,000,000 8.50%$ 4,675,000
-------------
Total increase 4,675,000
-------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 15,000,000 10-1/4% 1,537,500
November 15, 2020 $ 15,000,000 10-1/4% 1,537,500
First Mortgage Bonds, 9.70%
Series Due 2019 $ 20,000,000 9.70% 1,940,000
-------------
Total decrease 5,015,000
-------------
Net decrease $ 340,000
=============
<PAGE>
Exhibit FS-9
Financial Statements
Page 4 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
6) Amortization of debt discount $ 45
Discount on long-term debt $ 45
To record Union Light's incremental increase in amortization of debt
discount from issuing unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Maximum
Issuance Issuance
Balance Discount % Discount
------------- ------------- -------------
Union debentures $ 55,000,000 1.25%$ 687,500
=============
Annual amortization based on an assumed
30 year amortization period $ 22,917
=============
Original
Issuance Life of Annual
Discount Issue Amortization
------------- ------------- -------------
Issues Redeemed
---------------
First Mortgage Bonds
10-1/4% Series Due:
June 1, 2020 $ 201,000 30 Years $ 6,696
November 15, 2020 $ 230,250 30 Years 7,680
First Mortgage Bonds, 9.70%
Series Due 2019 $ 255,000 30 Years 8,496
-------------
$ 22,872
=============
Net increase in annual amortization $ 45
=============
<PAGE>
Exhibit FS-9
Financial Statements
Page 5 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
7) Amortization of loss on reacquired debt $ 177,926
Unamortized loss on reacquired debt $ 177,926
To record Union Light's amortization of loss on reacquired debt.
Calculations are as follows:
Loss on Assumed
Reacquired Amortization Annual
Debt Period Amortization
------------- ------------- -------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 1,340,700 25 Years $ 53,628
November 15, 2020 $ 1,351,945 25 Years 54,078
First Mortgage Bonds, 9.70%
Series Due 2019 $ 1,685,289 24 Years 70,220
-------------
$ 177,926
=============
8) Income tax expense $ 56,710
Cash $ 56,710
To record the impact on income tax expense from Union Light issuing
unsecured debt and redeeming first mortgage bonds.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Interest expense $ 340,000
Amortization of discount on long-term debt (45)
Amortization of loss on reacquired debt (177,926)
-------------
Net impact on income $ 162,029
=============
Impact on income taxes at
assumed rate of 35% $ 56,710
=============
<PAGE>
Exhibit FS-9
Financial Statements
Page 6 of 6
THE UNION LIGHT, HEAT AND POWER COMPANY
PRO FORMA JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $55 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT SECURITIES
NOTE (a) Loss on redemptions will be capitalized and amortized over the
shorter of (1) the remaining life of the issue redeemed, or (2)
the life of the new issue.
(b) A 30 year term for new issues has been assumed for pro-forma
statement purposes only. Actual term of new issues may be up to 40
years.
(c) Excess proceeds, if any, after redeeming securities will be used
for general and corporate purposes.
(d) For purposes of pro-forma financial statements, out-of-pocket
issuance costs have been ignored.
Exhibit FS-10
Financial Statements
Page 1 of 1
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENT OF BONDABLE PROPERTY ADDITIONS
Balance of unbonded bondable property
through December 31, 1993 available for
issuance of bonds at March 30, 1995 $ 158,698,023
===============
NOTE: Union Light can issue first mortgage bonds in principal
amounts equal to 60% of the cost or the then fair value
to Union Light (whichever shall be less) of unbonded bondable
property. In addition, Union Light is also permitted to
issue first mortgage bonds on the basis of previously
retired bonds under the terms of its First Mortgage.
Currently, Union Light is able to issue up to $9 million of
first mortgage bonds on the basis of previously retired
bonds in addition to the amount issuable against
unbonded bondable property reported above. If the
Securities are issued as unsecured obligations,
unbonded bondable property available for issuance of
bonds will not be impacted by the proposed transaction.
<TABLE>
<CAPTION>
Exhibit FS-11
Financial Statements
Page 1 of 2
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994
ASSETS
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- -------------
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric $ 8,292,625 $ 8,292,625
Gas 645,602 645,602
Common 185,718 185,718
------------ -------------
9,123,945 9,123,945
Accumulated depreciation 3,163,802 3,163,802
------------ -------------
5,960,143 5,960,143
Construction work in progress 238,750 238,750
------------ -------------
Total utility plant 6,198,893 6,198,893
------------ -------------
CURRENT ASSETS
Cash and temporary cash investments 71,880 $ 26,409 98,289
Restricted deposits 11,288 11,288
Accounts receivable less
accumulated provision of
$9,716,000 for doubtful accounts 299,509 299,509
Materials, supplies and
fuel, at average cost
Fuel for use in electric production 156,028 156,028
Gas stored for current use 31,284 31,284
Other materials and supplies 92,880 92,880
Property taxes applicable to subsequent year 112,420 112,420
Prepayments and other 36,416 36,416
------------ ------------- -------------
811,705 26,409 838,114
------------ ------------- -------------
OTHER ASSETS
Regulatory Assets
Post-in-service carrying costs and deferred
operating expenses 185,280 185,280
Phase-in deferred return and depreciation 100,943 100,943
Deferred demand-side management costs 104,127 104,127
Amounts due from customers -- income taxes 408,514 408,514
Deferred merger costs 49,658 49,658
Unamortized costs of reacquiring debt 70,424 32,413 102,837
Other 86,017 86,017
Other 134,281 (682) 133,599
------------ ------------- -------------
1,139,244 31,731 1,170,975
------------ ------------- -------------
$ 8,149,842 $ 58,140 $ 8,207,982
============ ============= =============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-14 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-11
Financial Statements
Page 2 of 2
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994
CAPITALIZATION AND LIABILITIES
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- ------------
(dollars in thousands)
<S> <C> <C> <C>
COMMON STOCK EQUITY
Common stock - $.01 par value;
Authorized shares - 600,000,000
Outstanding shares - 155,198,038 $ 1,552 $ 1,552
Paid-in capital 1,535,658 $ 1,261 1,536,919
Retained earnings 877,061 (3,042) 874,019
------------ ------------- ------------
Total common stock equity 2,414,271 (1,781) 2,412,490
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES
Not subject to mandatory redemption 267,929 (40,000) 227,929
Subject to mandatory redemption 210,000 (50,000) 160,000
LONG-TERM DEBT 2,715,269 149,921 2,865,190
------------ ------------- ------------
Total capitalization 5,607,469 58,140 5,665,609
------------ ------------- ------------
CURRENT LIABILITIES
Long-term debt due within one year 60,400 60,400
Notes payable 228,900 228,900
Accounts payable 266,467 266,467
Refund due to customers 15,482 15,482
Litigation settlement 80,000 80,000
Accrued taxes 258,041 258,041
Accrued interest 58,504 58,504
Other 36,610 36,610
------------ ------------
1,004,404 1,004,404
------------ ------------
OTHER LIABILITIES
Deferred income taxes 1,071,104 1,071,104
Unamortized investment tax credits 195,878 195,878
Accrued pension and other
postretirement benefit costs 133,578 133,578
Other 137,409 137,409
------------ ------------
1,537,969 1,537,969
------------ ------------- ------------
$ 8,149,842 $ 58,140 $ 8,207,982
============ ============= ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-14 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-12
Financial Statements
Page 1 of 1
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
------------ ------------ -------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES
Electric $ 2,481,779 $ 2,481,779
Gas 442,398 442,398
------------ -------------
2,924,177 2,924,177
------------ -------------
OPERATING EXPENSES
Fuel used in electric production 725,985 725,985
Gas purchased 248,293 248,293
Purchased and exchanged power 62,332 62,332
Other operation 563,650 563,650
Maintenance 200,959 200,959
Depreciation 294,395 294,395
Post-in-service deferred
operating expenses -- net (5,998) (5,998)
Phase-in deferred depreciation (2,161) (2,161)
Income taxes 152,181 $ (3,167) 149,014
Taxes other than income taxes 244,051 244,051
------------ ------------ -------------
2,483,687 (3,167) 2,480,520
------------ ------------ -------------
OPERATING INCOME 440,490 3,167 443,657
------------ ------------ -------------
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds
used during construction 6,201 6,201
Post-in-service carrying costs 9,780 9,780
Phase-in deferred return 15,351 15,351
Income taxes 10,609 10,609
Other - net (28,444) (28,444)
------------ -------------
13,497 13,497
------------ ------------ -------------
INCOME BEFORE INTEREST AND OTHER CHARGES 453,987 3,167 457,154
------------ ------------ -------------
INTEREST AND OTHER CHARGES
Interest on long-term debt 219,248 9,049 228,297
Other interest 20,370 20,370
Allowance for borrowed funds used during
construction (12,332) (12,332)
Preferred dividend requirements
of subsidiaries 35,559 (7,551) 28,008
------------ ------------ -------------
262,845 1,498 264,343
------------ ------------ -------------
NET INCOME $ 191,142 $ 1,669 $ 192,811
============ ============ =============
AVERAGE COMMON SHARES OUTSTANDING 147,426 147,426
EARNINGS PER COMMON SHARE $ 1.30 $ 0.01 $ 1.31
DIVIDENDS DECLARED PER COMMON SHARE $ 1.50 $ 1.50
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-14 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-13
Financial Statements
Page 1 of 1
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1994
Pro Forma
Actual Adjustments Pro Forma
------------ ----------- ------------
(dollars in thousands)
<S> <C> <C> <C>
Balance, December 31, 1993 $ 907,802 $ 907,802
Net income 191,142 $ 1,669 192,811
Dividends on common stock (221,362) (221,362)
Other (521) (4,711) (5,232)
------------ ----------- ------------
Balance, December 31, 1994 $ 877,061 $ (3,042) $ 874,019
============ =========== ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-14 of this filing.
</TABLE>
Exhibit FS-14
Financial Statements
Page 1 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
1) Cash $ 500,000,000
Long-term debt - Senior Debentures $ 400,000,000
Long-term debt - Junior Securities $ 100,000,000
To record the issuance and sale of $500,000,000 principal amount of
unsecured debt for The Cincinnati Gas & Electric Company (CG&E).
2) Cash $ 55,000,000
Long-term debt - Union Debentures $ 55,000,000
To record the issuance and sale of $55,000,000 principal amount of
unsecured debt by The Union Light, Heat and Power Company (Union Light).
3) Discount on long-term debt $ 8,500,000
Cash $ 8,500,000
To record the maximum issuance expenses for CG&E on unsecured debt at
1.25% of the principal amount of Senior Debentures, and 3.50% of the
principal amount for Junior Securities.
4) Discount on long-term debt $ 687,500
Cash $ 687,500
To record the maximum issuance expenses for Union Light on unsecured
debt at 1.25% of the principal amount of Union Debentures.
5) Pref. stock - Not subject to mandatory redemp. $ 40,000,000
Pref. stock - Subject to mandatory redemp. $ 50,000,000
Cash $ 90,000,000
To record CG&E's retirement of Cumulative Preferred Stock, 7.44% and
9.15% Series.
<PAGE>
Exhibit FS-14
Financial Statements
Page 2 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
6) Retained earnings $ 3,450,000
Cash $ 3,450,000
To record CG&E's charge to retained earnings for redemption premiums on
retirement of Cumulative Preferred Stock, 7.44% and 9.15% Series.
Calculations are as follows:
Redemption
Price Redemption
Balance Per Share Premium
------------- ------------- -------------
Cumulative Preferred Stock:
7.44% Series $ 40,000,000 $ 101.00 $ 400,000
9.15% Series 50,000,000 $ 106.10 3,050,000
------------- -------------
$ 90,000,000 $ 3,450,000
============= =============
7) Retained earnings $ 1,260,627
Paid-in capital $ 1,260,627
To record CG&E's write-off of issuance expense to retained earnings on
retired Cumulative Preferred Stock, 7.44% and 9.15% Series.
Calculations are as follows:
Issuance
Expense
-------------
Cumulative Preferred Stock:
7.44% Series $ 531,553
9.15% Series 729,074
-------------
$ 1,260,627
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 3 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
8) Long-term debt $ 350,000,000
Cash $ 350,000,000
To record CG&E's redemption of $100 million principal amount of First
Mortgage Bonds, 10-1/8% Series Due 2020, $150 million principal amount
of First Mortgage Bonds, 10.20% Series Due 2020, and $100 million
principal amount of First Mortgage Bonds, 9.70% Series Due 2019, by CG&E.
9) Long-term debt $ 50,000,000
Cash $ 50,000,000
To record Union Light's redemption of $15 million principal amount of
First Mortgage Bonds, 10-1/4% Series Due June 1, 2020, $15 million
principal amount of First Mortgage Bonds, 10-1/4% Series Due
November 15, 2020, and $20 million principal amount of First Mortgage
Bonds, 9.70% Series Due July 1, 2019.
<PAGE>
Exhibit FS-14
Financial Statements
Page 4 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
10)Unamortized loss on reacquired debt $ 29,402,907
Discount on long-term debt $ 3,398,247
Unamortized debt expense $ 444,660
Cash $ 25,560,000
To record CG&E's loss on redemption of $100 million principal amount of
First Mortgage Bonds, 10-1/8% Series Due 2020 at 107.27%, $150 million
principal amount of First Mortgage Bonds, 10.20% Series Due 2020 at
107.44%, and $100 million principal amount of First Mortgage Bonds,
9.70% Series Due 2019 at 107.13%.
Calculations are as follows:
10-1/8% 10.20% 9.70%
Series Due Series Due Series Due
2020 2020 2019 Total
------------- ------------- ------------- -------------
Princ. amount $ 100,000,000 $ 150,000,000 $ 100,000,000 $ 350,000,000
Discount on
long-term debt 1,089,900 1,443,900 864,447 3,398,247
Unamort. debt
expense 149,100 156,600 138,960 444,660
------------- ------------- ------------- -------------
Carrying amount $ 98,761,000 $ 148,399,500 $ 98,996,593 $ 346,157,093
============= ============= ============= =============
Redemp. price % 107.27% 107.44% 107.13%
Redemp. price $ 107,270,000 $ 161,160,000 $ 107,130,000 $ 375,560,000
Estimated loss
on redemption $ 8,509,000 $ 12,760,500 $ 8,133,407 $ 29,402,907
<PAGE>
Exhibit FS-14
Financial Statements
Page 5 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
11)Unamortized loss on reacquired debt $ 4,377,934
Discount on long-term debt $ 563,692
Unamortized debt expense $ 237,242
Cash $ 3,577,000
To record Union Light's loss on redemption of $15 million principal
amount of First Mortgage Bonds, 10-1/4% Series Due June 1, 2020 at
107.34%, $15 million principal amount of First Mortgage Bonds, 10-1/4%
Series Due November 15, 2020 at 107.20%, and $20 million principal
amount of First Mortgage Bonds, 9.70% Series Due 2019 at 106.98%.
Calculations are as follows:
10-1/4% 10-1/4% 9.70%
Series Due Series Due Series Due
June 1, 2020 Nov. 15, 2020 2019 Total
------------- -------------- ------------- -------------
Princ. amount $ 15,000,000 $ 15,000,000 $ 20,000,000 $ 50,000,000
Discount on
long-term debt 167,400 191,680 204,612 563,692
Unamort. debt
expense 72,300 80,265 84,677 237,242
------------- ------------- ------------- -------------
Carrying amount $ 14,760,300 $ 14,728,055 $ 19,710,711 $ 49,199,066
============= ============= ============= =============
Redemp. price % 107.34% 107.20% 106.98%
Redemp. price $ 16,101,000 $ 16,080,000 $ 21,396,000 $ 53,577,000
Estimated loss
on redemption $ 1,340,700 $ 1,351,945 $ 1,685,289 $ 4,377,934
<PAGE>
Exhibit FS-14
Financial Statements
Page 6 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
12)Interest on long-term debt $ 7,875,000
Cash $ 7,875,000
To record CG&E's increase in interest expense from issuing unsecured
debt and retiring first mortgage bonds.
Calculations are as follows: Assumed Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Increase
-------------------------
Senior debentures $ 400,000,000 8.50%$ 34,000,000
Junior securities $ 100,000,000 9.00% 9,000,000
-------------
Total increase 43,000,000
-------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 100,000,000 10-1/8% 10,125,000
10.20% Series Due 2020 $ 150,000,000 10.20% 15,300,000
9.70% Series Due 2019 $ 100,000,000 9.70% 9,700,000
-------------
Total decrease 35,125,000
-------------
Net increase $ 7,875,000
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 7 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
13)Cash $ 340,000
Interest on long-term debt $ 340,000
To record Union Light's decrease in interest expense from issuing
unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Assumed Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Increase
-------------------------
Union debentures $ 55,000,000 8.50%$ 4,675,000
-------------
Total increase 4,675,000
-------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 15,000,000 10-1/4% 1,537,500
November 15, 2020 $ 15,000,000 10-1/4% 1,537,500
First Mortgage Bonds, 9.70%
Series Due 2019 $ 20,000,000 9.70% 1,940,000
-------------
Total decrease 5,015,000
-------------
Net decrease $ 340,000
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 8 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
14)Amortization of debt discount $ 146,149
Discount on long-term debt $ 146,149
To record CG&E's incremental increase in amortization of debt discount
from issuing unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Maximum
Issuance Issuance
Balance Discount % Discount
------------- ------------- -------------
New Issues
----------
Senior debentures $ 400,000,000 1.25%$ 5,000,000
Junior securities $ 100,000,000 3.50% 3,500,000
-------------
$ 8,500,000
=============
Annual amortization based on an assumed
30 year amortization period $ 283,333
=============
Original
Issuance Life of Annual
Discount Issue Amortization
------------- ------------- -------------
Issues Redeemed
---------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 1,308,000 30 Years $ 43,596
10.20% Series Due 2020 $ 1,732,500 30 Years 57,756
9.70% Series Due 2019 $ 1,075,000 30 Years 35,832
-------------
$ 137,184
=============
Net increase in annual amortization $ 146,149
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 9 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
15)Amortization of debt discount $ 45
Discount on long-term debt $ 45
To record Union Light's incremental increase in amortization of debt
discount from issuing unsecured debt and retiring first mortgage bonds.
Calculations are as follows:
Maximum
Issuance Issuance
Balance Discount % Discount
------------- ------------- -------------
Union debentures $ 55,000,000 1.25%$ 687,500
=============
Annual amortization based on an assumed
30 year amortization period $ 22,917
=============
Original
Issuance Life of Annual
Discount Issue Amortization
------------- ------------- -------------
Issues Redeemed
---------------
First Mortgage Bonds
10-1/4% Series Due:
June 1, 2020 $ 201,000 30 Years $ 6,696
November 15, 2020 $ 230,250 30 Years 7,680
First Mortgage Bonds, 9.70%
Series Due 2019 $ 255,000 30 Years 8,496
-------------
$ 22,872
=============
Net increase in annual amortization $ 45
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 10 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
16)Amortization of loss on reacquired debt $ 1,189,672
Unamortized loss on reacquired debt $ 1,189,672
To record CG&E's amortization of loss on reacquired debt.
Calculations are as follows:
Loss on Assumed
Reacquired Amortization Annual
Debt Period Amortization
------------- ------------- -------------
First Mortgage Bonds:
10-1/8% Series Due 2020 $ 8,509,000 25 Years $ 340,360
10.20% Series Due 2020 $ 12,760,500 25 Years 510,420
9.70% Series Due 2019 $ 8,133,407 24 Years 338,892
-------------
$ 1,189,672
=============
17)Amortization of loss on reacquired debt $ 177,926
Unamortized loss on reacquired debt $ 177,926
To record Union Light's amortization of loss on reacquired debt.
Calculations are as follows:
Loss on Assumed
Reacquired Amortization Annual
Debt Period Amortization
------------- ------------- -------------
First Mortgage Bonds, 10-1/4%
Series Due:
June 1, 2020 $ 1,340,700 25 Years $ 53,628
November 15, 2020 $ 1,351,945 25 Years 54,078
First Mortgage Bonds, 9.70%
Series Due 2019 $ 1,685,289 24 Years 70,220
-------------
$ 177,926
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 11 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
18)Cash $ 7,551,000
Preferred dividends $ 7,551,000
To record the reduction in preferred dividends from CG&E's redemption of
preferred stock.
Calculations are as follows:
Dividend Redemption
Balance Rate Premium
------------- ------------- -------------
Cumulative Preferred Stock:
7.44% Series $ 40,000,000 7.44%$ 2,976,000
9.15% Series 50,000,000 9.15% 4,575,000
------------- -------------
$ 90,000,000 $ 7,551,000
============= =============
19)Cash $ 3,223,787
Income tax expense $ 3,223,787
To record the impact on income tax expense from CG&E issuing unsecured
debt and redeeming first mortgage bonds and preferred stock.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Interest expense $ (7,875,000)
Amortization of discount on long-term debt (146,149)
Amortization of loss on reacquired debt (1,189,672)
-------------
Net impact on income $ (9,210,821)
=============
Impact on income taxes at
assumed rate of 35% $ (3,223,787)
=============
<PAGE>
Exhibit FS-14
Financial Statements
Page 12 of 12
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO THE
ISSUANCE OF UP TO $555 MILLION OF DEBT SECURITIES AND RELATED
REDEMPTION OF OUTSTANDING DEBT AND PREFERRED SECURITIES
Debit Credit
------------- -------------
20)Income tax expense $ 56,710
Cash $ 56,710
To record the impact on income tax expense from Union Light issuing
unsecured debt and redeeming first mortgage bonds.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Interest expense $ 340,000
Amortization of discount on long-term debt (45)
Amortization of loss on reacquired debt (177,926)
-------------
Net impact on income $ 162,029
=============
Impact on income taxes at
assumed rate of 35% $ 56,710
=============
NOTE (a) Loss on redemptions will be capitalized and amortized over the
shorter of (1) the remaining life of the issue redeemed, or (2)
the life of the new issue.
(b) A 30 year term for new issues has been assumed for pro-forma
statement purposes only. Actual term of new issues may be up to 40
years.
(c) Excess proceeds, if any, after redeeming securities will be used
for general and corporate purposes.
(d) For purposes of pro-forma financial statements, out-of-pocket
issuance costs have been ignored.
[ARTICLE] OPUR1
[LEGEND]
THIS SCHEDULE IS EXHIBIT FS-15 AND CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS
OF INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE CINCINNATI GAS
& ELECTRIC COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
[MULTIPLIER] 1,000
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] YEAR YEAR
[FISCAL-YEAR-END] DEC-31-1994 DEC-31-1994
[PERIOD-START] JAN-01-1994 JAN-01-1994
[PERIOD-END] DEC-31-1994 DEC-31-1994
[BOOK-VALUE] PER-BOOK PRO-FORMA
[TOTAL-NET-UTILITY-PLANT] 3,795,644 3,795,644
[OTHER-PROPERTY-AND-INVEST] 0 0
[TOTAL-CURRENT-ASSETS] 596,696 623,105
[TOTAL-DEFERRED-CHARGES] 748,889 781,302
[OTHER-ASSETS] 40,436 39,754
[TOTAL-ASSETS] 5,181,665 5,239,805
[COMMON] 762,136 762,136
[CAPITAL-SURPLUS-PAID-IN] 337,874 339,135
[RETAINED-EARNINGS] 432,962 429,920
[TOTAL-COMMON-STOCKHOLDERS-EQ] 1,532,972 1,531,191
[PREFERRED-MANDATORY] 210,000 160,000
[PREFERRED] 80,000 40,000
[LONG-TERM-DEBT-NET] 1,837,757 1,987,678
[SHORT-TERM-NOTES] 14,500 14,500
[LONG-TERM-NOTES-PAYABLE] 0 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0 0
[LONG-TERM-DEBT-CURRENT-PORT] 0 0
[PREFERRED-STOCK-CURRENT] 0 0
[CAPITAL-LEASE-OBLIGATIONS] 0 0
[LEASES-CURRENT] 0 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 1,506,436 1,506,436
[TOT-CAPITALIZATION-AND-LIAB] 5,181,665 5,239,805
[GROSS-OPERATING-REVENUE] 1,788,185 1,788,185
[INCOME-TAX-EXPENSE] 104,128 100,961
[OTHER-OPERATING-EXPENSES] 1,392,721 1,392,721
[TOTAL-OPERATING-EXPENSES] 1,496,849 1,493,682
[OPERATING-INCOME-LOSS] 291,336 294,503
[OTHER-INCOME-NET] 17,215 17,215
[INCOME-BEFORE-INTEREST-EXPEN] 308,551 311,718
[TOTAL-INTEREST-EXPENSE] 150,240 159,289
[NET-INCOME] 158,311 152,429
[PREFERRED-STOCK-DIVIDENDS] 22,377 14,826
[EARNINGS-AVAILABLE-FOR-COMM] 135,934 137,603
[COMMON-STOCK-DIVIDENDS] 158,970 158,970
[TOTAL-INTEREST-ON-BONDS] 150,386 159,435
[CASH-FLOW-OPERATIONS] 447,358 406,295
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
</TABLE>
[ARTICLE] OPUR1
[LEGEND]
THIS SCHEDULE IS EXHIBIT FS-16 AND CONTAINS SUMMARY FINANICAL INFORMATION
EXTRACTED FROM THE BALANCE SHEETS, STATEMENTS OF INCOME AND STATEMENTS OF
CASH FLOWS OF THE UNION LIGHT, HEAT AND POWER COMPANY AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[MULTIPLIER] 1,000
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] YEAR YEAR
[FISCAL-YEAR-END] DEC-31-1994 DEC-31-1994
[PERIOD-START] JAN-01-1994 JAN-01-1994
[PERIOD-END] DEC-31-1994 DEC-31-1994
[BOOK-VALUE] PER-BOOK PRO-FORMA
[TOTAL-NET-UTILITY-PLANT] 236,848 236,848
[OTHER-PROPERTY-AND-INVEST] 0 0
[TOTAL-CURRENT-ASSETS] 45,378 46,397
[TOTAL-DEFERRED-CHARGES] 1,785 1,785
[OTHER-ASSETS] 3,117 7,079
[TOTAL-ASSETS] 287,128 292,109
[COMMON] 8,780 8,780
[CAPITAL-SURPLUS-PAID-IN] 18,839 18,839
[RETAINED-EARNINGS] 74,203 74,308
[TOTAL-COMMON-STOCKHOLDERS-EQ] 101,822 101,927
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
[LONG-TERM-DEBT-NET] 89,238 94,114
[SHORT-TERM-NOTES] 14,500 14,500
[LONG-TERM-NOTES-PAYABLE] 0 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0 0
[LONG-TERM-DEBT-CURRENT-PORT] 0 0
[PREFERRED-STOCK-CURRENT] 0 0
[CAPITAL-LEASE-OBLIGATIONS] 0 0
[LEASES-CURRENT] 0 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 81,568 81,568
[TOT-CAPITALIZATION-AND-LIAB] 287,128 292,109
[GROSS-OPERATING-REVENUE] 249,535 249,535
[INCOME-TAX-EXPENSE] 5,342 5,399
[OTHER-OPERATING-EXPENSES] 227,803 227,803
[TOTAL-OPERATING-EXPENSES] 233,145 233,202
[OPERATING-INCOME-LOSS] 16,390 16,333
[OTHER-INCOME-NET] 370 370
[INCOME-BEFORE-INTEREST-EXPEN] 16,760 16,703
[TOTAL-INTEREST-EXPENSE] 8,373 8,211
[NET-INCOME] 8,387 8,492
[PREFERRED-STOCK-DIVIDENDS] 0 0
[EARNINGS-AVAILABLE-FOR-COMM] 8,387 8,492
[COMMON-STOCK-DIVIDENDS] 3,511 3,511
[TOTAL-INTEREST-ON-BONDS] 8,161 7,999
[CASH-FLOW-OPERATIONS] 32,934 29,077
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
</TABLE>
[ARTICLE] OPUR1
[ARTICLE] OPUR1
[LEGEND]
THIS SCHEDULE IS EXHIBIT FS-17 AND CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS
OF INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS OF CINERGY CORP. AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[MULTIPLIER] 1,000
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] YEAR YEAR
[FISCAL-YEAR-END] DEC-31-1994 DEC-31-1994
[PERIOD-START] JAN-01-1994 JAN-01-1994
[PERIOD-END] DEC-31-1994 DEC-31-1994
[BOOK-VALUE] PER-BOOK PRO-FORMA
[TOTAL-NET-UTILITY-PLANT] 6,198,893 6,198,893
[OTHER-PROPERTY-AND-INVEST] 0 0
[TOTAL-CURRENT-ASSETS] 811,705 838,114
[TOTAL-DEFERRED-CHARGES] 1,004,963 1,037,376
[OTHER-ASSETS] 134,281 133,599
[TOTAL-ASSETS] 8,149,842 8,207,982
[COMMON] 1,552 1,552
[CAPITAL-SURPLUS-PAID-IN] 1,535,658 1,536,919
[RETAINED-EARNINGS] 877,061 874,019
[TOTAL-COMMON-STOCKHOLDERS-EQ] 2,414,271 2,412,490
[PREFERRED-MANDATORY] 210,000 160,000
[PREFERRED] 267,929 227,929
[LONG-TERM-DEBT-NET] 2,715,269 2,865,190
[SHORT-TERM-NOTES] 228,900 228,900
[LONG-TERM-NOTES-PAYABLE] 0 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0 0
[LONG-TERM-DEBT-CURRENT-PORT] 60,400 60,400
[PREFERRED-STOCK-CURRENT] 0 0
[CAPITAL-LEASE-OBLIGATIONS] 0 0
[LEASES-CURRENT] 0 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 2,253,073 2,253,073
[TOT-CAPITALIZATION-AND-LIAB] 8,149,842 8,207,982
[GROSS-OPERATING-REVENUE] 2,924,177 2,924,177
[INCOME-TAX-EXPENSE] 152,181 149,014
[OTHER-OPERATING-EXPENSES] 2,331,506 2,331,506
[TOTAL-OPERATING-EXPENSES] 2,483,687 2,480,520
[OPERATING-INCOME-LOSS] 440,490 443,657
[OTHER-INCOME-NET] 13,497 13,497
[INCOME-BEFORE-INTEREST-EXPEN] 453,987 457,154
[TOTAL-INTEREST-EXPENSE] 227,286 236,335
[NET-INCOME] 226,701 220,819
[PREFERRED-STOCK-DIVIDENDS] 35,559 28,008
[EARNINGS-AVAILABLE-FOR-COMM] 191,142 192,811
[COMMON-STOCK-DIVIDENDS] 221,362 221,362
[TOTAL-INTEREST-ON-BONDS] 219,248 228,297
[CASH-FLOW-OPERATIONS] 440,408 399,345
[EPS-PRIMARY] 1.30 1.31
[EPS-DILUTED] 1.30 1.31
</TABLE>
