As filed with the Securities and Exchange Commission on September 22, 1995
File No. 70-_____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
FORM U-1 DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company filing this statement
and address of principal executive offices)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Treasurer
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name and address of agent of service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Declaration to:
Cheryl M. Foley
Vice President, General Counsel
and Corporate Secretary
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
<PAGE>
Item 1. Description of Proposed Transactions.
A. Background; Requested Authorization.
By order dated October 21, 1994 in File No. 70-8427 (Rel. No. 35-26146) (the
"Merger Order"), the Commission authorized the proposed business combination
of PSI Energy, Inc. ("PSI") and The Cincinnati Gas & Electric Company
("CGE"), pursuant to which Cinergy Corp., a Delaware corporation ("Cinergy"),
registered under the Public Utility Holding Company Act of 1935, as amended
(the "Act"), as a holding company on October 25, 1994. The Merger Order also
authorized Cinergy, through December 31, 1995, to issue (and/or acquire in
open market transactions) and sell up to 10 million shares of Cinergy common
stock, $.01 par value per share, to the Cinergy Dividend Reinvestment and
Stock Purchase Plan (the "DRIP"), certain Cinergy stock-based employee
benefit plans/1/, and the 401(k) savings plans of PSI and CGE/2/. As of
September 1, 1995, Cinergy had issued (or, in the case of open market
transactions, had acquired on behalf of plan participants) and sold to the
Plans a total of 2,613,304 shares of common stock pursuant to the Merger
Order./3/
Cinergy now seeks Commission authorization to issue (or, in the case of
shares purchased on the open market, to acquire on behalf of plan
participants) and sell under the Plans, from time to time through December
31, 2000, the remaining shares of common stock covered under the Merger
Order, consisting of 7,386,696 shares at September 1, 1995 (the "Remaining
Shares"), and up to an additional 15 million shares of Cinergy common stock
(the "Additional Shares" and, together with the Remaining Shares, the
"Shares").
Cinergy will use the proceeds from sales of the Shares for general corporate
purposes, including, without limitation, repayment of short-term indebtedness
and investments in subsidiary companies. Without further authorization from
the Commission, none of such proceeds will be used to acquire an interest in
an exempt wholesale generator ("EWG") or foreign utility company ("FUCO"), as
defined in the Act.
B. The Plans
On October 18, 1994, the Cinergy Board of Directors adopted, and the common
stockholders of Cinergy approved, the DRIP and the Stock Benefit Plans, each
of which became effective as of October 24, 1994, the date of consummation of
the Cinergy merger (the "Merger Date"). The DRIP superseded the respective
dividend reinvestment and stock purchase plans of CGE and PSI's then-parent
company, PSI Resources, Inc. ("Resources"). The Stock Benefit Plans are
similar to predecessor stock-based employee benefit plans of PSI or
Resources; as of the Merger Date, each such PSI or Resources predecessor plan
was merged into and became a part of the respective Stock Benefit Plan
bearing the same name. The Cinergy merger had no effect on the 401(k) Plans,
except that, with respect to the company common stock investment option (see
below), shares of Cinergy common stock superseded those of CGE or Resources.
The following summarizes the relevant provisions of the Plans and is
qualified in its entirety by the provisions of the plan documents themselves,
copies of which are filed as Exhibits B-1 through B-10 and reference to which
is made for further information respecting the Plans. Reference is also made
to sections D, E and F of Item 1 of the Application-Declaration, as amended,
in File No. 70-8427 for a description of the Plans.
1. DRIP
All holders of record of shares of Cinergy common stock, PSI cumulative
preferred stock or CGE cumulative preferred stock ("Eligible Securities") may
participate in the DRIP. Shares of Cinergy common stock issued to plan
participants under the DRIP consist, at Cinergy's discretion, of previously
authorized but unissued shares and/or shares purchased on behalf of plan
participants on the open market.
A principal purpose of the DRIP is to encourage long-term investment by
providing holders of Eligible Securities with a simple and convenient method
of investing cash dividends and optional cash payments in shares of Cinergy
common stock at a price equal to market value, without payment of any
brokerage commission or service charge, while preserving participants' voting
rights over shares held in their accounts. Full investment of funds is
possible under the DRIP, subject to minimum and maximum purchase limits,
because the DRIP permits fractional as well as whole shares to be credited to
a participant's account. The DRIP also provides Cinergy with a means to
raise equity capital and to increase ownership by smaller, long-term
investors.
Reinvestment Options: Participants have three options for reinvestment of
dividends in additional shares of Cinergy common stock: (1) automatically
invest in Cinergy common stock all of the participant's cash dividends on all
certificated shares of that class, as well as all of the cash dividends of
Cinergy common stock purchased pursuant to the DRIP ("Plan Shares") and any
optional cash payments made by the participant; (2) automatically invest all
of the participant's cash dividends on only the number of certificated shares
specified on the authorization form, as well as all of the cash dividends on
Plan Shares, and any optional cash payments made by the participant; and (3)
invest optional cash payments, and reinvest all cash dividends on Plan
Shares, in shares of Cinergy common stock and remit directly to the plan
participant cash dividends on all certificated shares. A participant may
change the method of participation at any time by completing an account
change request and returning it to the plan administrator. Under any of the
reinvestment options, participants may make optional cash payments from time
to time of not less than $25 for any investment date and not more than
$100,000 in any calendar year. There are no brokerage or other fees on
purchases. All costs of administering the DRIP are paid by Cinergy; however,
charges will be incurred by plan participants who direct the plan
administrator to sell their shares on withdrawal (see "Sales of Shares"
below).
The investment date for optional cash payments and cash dividends is the 15th
day of each month.
Share Prices and Purchases: When purchases of shares of Cinergy common stock
are made from authorized but unissued shares, the purchase price will be the
average of the high and low prices (computed to four decimal places) of
Cinergy common stock, as reported by the "New York Stock Exchange - Composite
Transactions" published in The Wall Street Journal (the "NYSE") for the
appropriate investment date, or, if no trading in Cinergy common stock occurs
on that date, the next preceding date on which such trading occurred.
When the source of Cinergy common stock purchased for any investment date is
the open market, the purchase price will be the weighted average purchase price
(computed to four decimal places), excluding brokerage commissions, of such
shares. The purchases will be made on the New York Stock Exchange or in
negotiated transactions.
If Cinergy elects to meet the requirements of participants by purchasing
shares of Cinergy common stock on the open market, an independent agent or
agents appointed by Cinergy ("Independent Agent") will act on behalf of the
participants in buying such shares, and Cinergy will pay all administrative
costs of acquisition, including brokerage fees and commissions. The
Independent Agent will determine the exact volume, timing and price of such
purchases, based on the amount of reinvested dividends, optional cash
payments received, market conditions, and requirements of applicable federal
securities laws. The Independent Agent will also sell shares of Cinergy
common stock on behalf of participants.
There is no discount program under the DRIP.
Sales of Shares: A participant may direct that all or a portion of his/her
shares be sold or withdrawn, or that his/her participation in the DRIP
terminate, by submitting to Cinergy an appropriately executed account change
request form or other written notification. Requests for withdrawal and/or
termination will normally be processed by Cinergy within five business days
following receipt of a written request signed by the participant. If a
participant requests that shares be sold, Cinergy will combine such shares
with shares for which requests to sell were received from other participants
during that week, and will then place a market order with the Independent
Agent. Proceeds from any sale, less applicable brokerage commissions, will
be remitted to the participant following settlement through a broker, in
accordance with applicable settlement rules. The sale price for shares sold
through withdrawal or termination will be the market price of Cinergy common
stock at the time of sale. If shares sold are combined with shares for which
requests to sell were received from other participants, the sale price will
be the average price for all shares sold.
A participant will be entitled to request in writing and receive a
certificate representing the full shares of Cinergy common stock credited to
his/her account. Whether the participant requests to sell the shares in
his/her account or elects to receive certificates for the full shares in
his/her account, the participant's interest in fractional shares will be paid
in cash.
Amendment/Termination: Cinergy reserves the right to suspend, modify or
terminate the DRIP or to combine the plan into a new DRIP. All participants
will receive notification of any such suspension, modification, termination
or combination.
Dividends and Voting Rights: Any shares of Cinergy common stock distributed
by Cinergy as a stock dividend on shares credited to a participant's account,
or as a split of these shares, will be credited to the participant's account.
Each participant has a right to vote the shares credited to such
participant's account. Proxy cards will be distributed to participants and
all Plan Shares will be voted in the manner indicated by the proxy card. If
a participant does not return a valid proxy card, the shares of Cinergy
common stock held in such participant's account will not be voted.
Communication Plan: Existing shareholders are notified of the existence of
the DRIP through letters and inserts with financial reports and dividend checks.
Eligible persons expressing an interest in the DRIP will receive a prospectus
and related enrollment materials. No solicitations of the general public are
planned at this time.
For further information regarding the DRIP, reference is made to Exhibits B-1
and C-1.
2. Employee Stock Purchase and Savings Plan
Cinergy's Employee Stock Purchase and Savings Plan ("Stock Purchase Plan") is
an employee stock purchase plan under Section 423 of the Internal Revenue
Code of 1986, as amended, in which eligible employees may be granted the
right to purchase shares of Cinergy common stock. Under the Stock Purchase
Plan, only authorized but unissued shares of common stock may be issued to
eligible employees. The Stock Purchase Plan is administered by a committee
("Plan Committee") of the Cinergy Board of Directors ("Cinergy Board"), the
members of which are ineligible to participate therein.
Employees of Cinergy or any of its subsidiaries who meet the eligibility
requirements may participate in the Stock Purchase Plan. Generally, the
eligibility requirements are that an employee: (1) must have been employed by
Cinergy or any of its subsidiaries (collectively, "Cinergy Companies" and,
individually, a "Cinergy Company") for at least nine months as of the first
day of the Offering Period (defined below); and (2) must normally work at
least 20 hours a week and five months a year. Full officers of Cinergy,
Cinergy Services, Inc., CG&E or PSI, as well as employees who receive a
grant of a stock option or stock appreciation right under the Cinergy Stock
Option Plan, are not eligible to participate in the Stock Purchase Plan.
The initial offering of common stock under the Stock Purchase Plan is a
continuation of the 1994 offering period under the Resources Employee Stock
Purchase and Savings Plan, which was merged into the Stock Purchase Plan on
the Merger Date. Each offering for sale of common stock under the Stock
Purchase Plan will have a term of 26 months ("Offering Period") commencing
and ending on dates determined by the Plan Committee. The initial offering
will end on December 31, 1996.
The purchase price per share of common stock under the Stock Purchase Plan is
equal to the fair market value of a share of common stock on the first day of
the Offering Period less 5%. For this purpose, the fair market value of a
share of common stock is equal to the average of the high and low sales
prices of a share of common stock as reported by the NYSE for the first day
of the Offering Period or, if no trading of common stock occurs on the New
York Stock Exchange that day, the last day prior to the first day of the
Offering Period on which trading in common stock does occur.
An eligible employee must accumulate funds to purchase common stock under the
Stock Purchase Plan by authorizing the appropriate Cinergy Company to deduct
an amount from each paycheck and deposit that amount in an interest earning
account. On the purchase date (the last day of the Offering Period), the
employee may apply some or all of the total amount of deposits made to the
account plus accrued interest to the purchase of shares of Cinergy common
stock or may receive the balance of the account in cash or any combination
thereof.
The maximum number of shares of common stock that an eligible employee may
purchase in an offering under the Stock Purchase Plan is equal to: (1) the
sum of (a) 10% of his or her annual base compensation as of the first day of
the second calendar month preceding the first day of the relevant Offering
Period, multiplied by 26/12ths, plus (b) the amount of interest earned on the
employee's account during the relevant Offering Period, divided by (2) the
purchase price. No employee may participate in the Stock Purchase Plan if
(i) participation would permit the employee's rights to purchase shares of
common stock under all employee stock purchase plans of Cinergy Companies to
accrue at a rate exceeding $25,000 of fair market value of such shares
(determined at the time such right is granted) for each calendar year during
which such right is outstanding at any time; or (ii) the employee owns,
immediately after his or her participation commences, stock possessing 5% or
more of the total combined voting power or value of all classes of stock of
any Cinergy Company.
At any time by action of the Cinergy Board or the Plan Committee, Cinergy may
alter, amend, suspend or terminate the Stock Purchase Plan, or alter the
terms of participation in any offering thereunder, subject to certain
exceptions. No such action may, without the approval of Cinergy's
shareholders, (1) increase the maximum number of shares of common stock that
may be offered or the maximum number of shares of common stock that each
eligible employee may purchase, (2) extend the maximum term of an offering
beyond 26 months, (3) decrease the purchase price, (4) materially expand the
eligibility requirements, or (5) materially increase benefits.
For further information regarding the Stock Purchase Plan, reference is made
to Exhibits B-2, B-3, C-2 and H-1.
3. Performance Shares Plan
Cinergy's Performance Shares Plan is implemented through a long-term
incentive compensation program adopted by the board of directors of each
Cinergy Company, based on corporate target goals and/or individual goals and
award opportunities. At Cinergy's discretion, authorized but unissued shares
of Cinergy common stock and/or shares purchased on behalf of plan
participants on the open market may be issued under the Performance Shares
Plan. The Performance Shares Plan is administered by the Plan Committee, the
members of which are ineligible to participate therein.
Employees who are officers or who are employed in a significant executive,
administrative, operational or professional capacity or who have the
potential to significantly contribute to the future success of the applicable
Cinergy Company are eligible to receive awards under the Performance Shares
Plan. The respective Cinergy Company's board of directors will select, subject
to the Plan Committee's approval, the employees (other than the executive
officers) who will participate in that company's long-term incentive
compensation program for any performance period. Eligible employees who are
executive officers will be selected to participate in Cinergy's long-term
incentive compensation program for any performance period by the Plan
Committee.
For each performance period for which an eligible employee is selected to
participate, the employee will receive a contingent grant of a number of
shares of Cinergy common stock ("Performance Shares"). Whether the employee
earns a vested right to receive the shares will depend on the attainment of
the corporate target goals and/or individual target goals applicable to that
performance period. The number of Performance Shares contingently granted to
an employee for a performance period will be equal to the value of the
employee's award opportunity for the performance period divided by the
average of the closing prices of Cinergy common stock for the 20 consecutive
trading days immediately preceding the first day of the performance period as
reported by the NYSE. A Cinergy Company's board of directors (or, with
respect to executive officers, the Plan Committee) will determine each
employee's award opportunity by multiplying the employee's annual base salary
as of the first day of the performance period by the product of the
employee's "Percentage Incentive" (as defined in the plan document and as
determined by the board of directors or, with respect to executive officers,
by the Plan Committee) multiplied by the number of years in the performance
period.
Subject to the Plan Committee's approval, each Cinergy Company's board of
directors will establish one or more corporate target goals for each
performance period that will apply to its employees (other than executive
officers). For these purposes, a "corporate target goal" is an objective
criterion pertaining to the Cinergy Company's performance, efficiency or
profitability, including stock price, market share, sales, earnings per
share, costs, etc. Subject to the Plan Committee's approval, each Cinergy
Company's board of directors may, but need not, establish one or more
individual goals for each eligible employee (other than an executive officer)
for a performance period. For these purposes, an "individual goal" is an
objective or subjective criterion pertaining to individual effort as to
enhancement of either individual performance or achievement of corporate
target goals or other individual goals. The Plan Committee will establish
one or more corporate goals and may establish one or more individual goals
for executive officers.
In calculating the number of shares of Cinergy common stock in which an
employee who has received a contingent grant of Performance Shares has earned
a vested right as of the end of a performance period, the Cinergy Company's
board of directors will first determine the extent to which each corporate
target goal and individual target goal has been met for the performance
period. The factor determined by the board of directors will be multiplied
by the weight, if any, assigned to each corporate target goal or individual
target goal (expressed as a percentage). The resulting percentages will be
added and the total, when multiplied by the number of Performance Shares
awarded to an employee, will equal the number of shares of Cinergy common
stock in which the employee has earned a vested right. A Cinergy Company's
board of directors may enhance an employee's award above the maximum level in
recognition of exemplary performance as to subjective individual goals.
The number of shares of common stock in which an employee has earned a vested
right for a performance period generally will be distributed in two equal
installment payments on the February 1 following the end of the performance
period and on the next following February 1. Each installment payment will
be distributed in the form of whole shares of common stock, except that cash
will be distributed in lieu of fractional shares and an amount approximately
equal to the amount of federal, state and local income taxes imposed on the
employee's receipt of the installment payment will be distributed in cash.
In no event will the value of any distributions during any calendar year to
an executive officer exceed an amount equal to 150 percent of the officer's
base salary.
Subject to certain exceptions, Cinergy may at any time alter, amend, suspend
or terminate the Performance Shares Plan or may suspend or terminate the
payment of benefits thereunder. No such action may, without the approval of
Cinergy's shareholders, (1) withdraw the plan's administration from the Plan
Committee, (2) permit participation by members of the Plan Committee, (3)
materially increase the cost of the plan to the Cinergy Company or the
benefits thereunder, or (4) materially modify the eligibility requirements
for participants.
For further information with respect to the Performance Shares Plan,
reference is made to Exhibits B-4 and C-3.
4. Stock Option Plan
Cinergy's Stock Option Plan is a stock option plan in which non-employee
directors and eligible employees of the Cinergy Companies may be granted
incentive stock options, non-qualified stock options, stock appreciation
rights and/or cash awards granted in connection with non-qualified stock
options to reimburse an optionee for the income taxes imposed upon the
exercise of such an option. Shares of Cinergy common stock issuable under
the Stock Option Plan consist, at Cinergy's discretion, of authorized but
unissued shares and/or shares purchased on behalf of plan participants on the
open market. The Stock Option Plan is administered by the Plan Committee,
which grants stock options, stock appreciation rights and cash awards to
eligible employees selected by it.
Employees of Cinergy or any of its subsidiaries who are officers or are
employed in a significant executive, supervisory, administrative, operational
or professional capacity or who have the potential to contribute to the
future success of Cinergy or its subsidiaries are eligible to receive awards
under the Stock Option Plan. Non-employee directors are also eligible to
receive awards under the plan.
Concurrently with the granting of any stock option, the Plan Committee will
establish the exercise price per share of Cinergy common stock subject to the
stock option, which in no event will be less than 100 percent of the fair
market value per share of Cinergy common stock on the date of the grant. For
this purpose, fair market value will be determined based on the average of
the high and low sales prices of a share of Cinergy common stock on the date
of grant (or on the preceding trading day if the date of grant is not a
trading day) as reported by the NYSE. Also at the time of grant, the Plan
Committee will establish the period of time (not to exceed ten years) during
which the stock option will be exercisable. Stock options granted to
eligible employees may be exercisable in full at any time, or in installments
at specified times, during the term of the stock option. The foregoing
notwithstanding, except in connection with a change in control, no stock
option will be exercisable in whole or in part for the first twelve months
after the date of grant.
Each non-employee director was granted, as of the Merger Date, a
non-qualified stock option to acquire 12,500 shares of common stock at an
exercise price per share equal to the average of the high and low sales
prices of a share of Cinergy common stock on October 25, 1994 (the initial
trading date of Cinergy common stock) as reported by the NYSE. Each person
who is elected for the first time to be a non-employee director (other than
persons who were previously employees of CG&E or PSI) will be granted, as of
the first Board meeting held on or after the date he or she becomes a
non-employee director, a non-qualified stock option to acquire 12,500 shares
of common stock at an exercise price per share equal to the average of the
high and low sales price of a share of Cinergy common stock as reported on
the NYSE on the date he or she first becomes a non-employee director. Each
non-qualified stock option granted to a non-employee director will have a
term of ten years and will become exercisable with respect to 20 percent of
the shares of common stock subject thereto on each of the first five
anniversaries of the grant date. Non-employee directors are not eligible to
receive any additional awards.
Any awardee (other than a non-employee director) who has been granted a stock
option may be granted a stock appreciation right, which entitles the awardee
to receive, upon surrender of all or a portion of the stock option, an amount
equal to the excess of the fair market value of a share of common stock on
the date of the exercise of the stock appreciation right over the exercise
price per share of the stock option, multiplied by the number of shares of
common stock with respect to which the stock option has been surrendered.
The right to exercise a stock appreciation right terminates to the extent an
awardee exercises the stock option to which it is attached. Payment by the
respective Cinergy Company of the amount receivable by an awardee upon the
exercise of a stock appreciation right may be made, as determined by the Plan
Committee, by the delivery of whole shares of common stock, cash or any
combination of shares of common stock and cash. In no event may a stock
appreciation right be exercised more than ten years after the date of the
grant of the tandem stock option. To the extent a stock appreciation right
is exercised, the tandem stock option will be deemed to have been exercised.
A cash award is a right granted to an awardee who has been granted a
non-qualified stock option to receive a cash payment, at the times and in the
amounts determined by the Plan Committee, that is intended to reimburse the
awardee for all or a portion of the federal, state and local income taxes
imposed upon the awardee as a consequence of the exercise of the
non-qualified stock option.
In general, the Cinergy Board may at any time alter, amend, suspend or
terminate the Stock Option Plan. Without the approval of Cinergy's
shareholders, no such action may (1) increase the maximum number of shares of
common stock that may be issued in respect of awards, (2) change the class of
employees eligible to participate, or (3) cause the plan no longer to comply
with applicable rules under the Securities Exchange Act of 1934, as amended,
or other applicable requirements. No amendment or termination of the Stock
Option Plan may adversely affect any stock option, stock appreciation right
or cash award previously granted without the consent of the awardee.
For further information with respect to the Stock Option Plan, reference is
made to Exhibits B-5 and C-4.
5. Directors' Deferred Compensation Plan
Cinergy's Directors' Deferred Compensation Plan ("Directors' Plan") allows
each non-employee director to defer fees for serving as a non-employee
director, and to have such fees accrued as cash or theoretical units of
shares of Cinergy common stock. Shares of common stock offered under the
Directors' Plan consist, at Cinergy's discretion, of authorized but unissued
shares and/or shares purchased on behalf of plan participants on the open
market. The Directors' Plan is administered by the Plan Committee.
All non-employee directors may participate in the Directors' Plan. On an
annual basis, on or before July 1, a non-employee director may elect to defer
the receipt of all or a specified portion of his or her fees payable for
succeeding years.
Cinergy's Secretary will establish and maintain a separate recordkeeping
account for each participant to which all deferred fees for that participant
will be credited. At the time a deferral election is made, a participant may
elect to have all or a portion of the deferred fees credited to his or her
account as units, each representing a share of common stock, or as cash.
Deferred fees that are credited to a participant's account as units will be
deemed to be invested in that number of hypothetical shares of Cinergy common
stock obtained by dividing the dollar amount of the deferred fees by the
closing price per share of Cinergy common stock as reported by the NYSE for
the date the fees would have been otherwise paid to the participant. From
time to time thereafter, additional units will be credited to the
participant's account to reflect any dividend or other distribution the
participant would have received if the participant had been the record owner
of that number of shares of Cinergy common stock equal to the number of units
credited to his or her account as of the dividend record date or as of the
relevant date for any other distribution. Deferred fees that are credited to
a participant's account hypothetically as cash will be credited with interest
at a rate, adjusted quarterly, equal to the per annum rate equivalent to the
quoted interest rate, in effect on the first business day of any calendar
quarter, for a one-year certificate of deposit of a principal amount of
$100,000 as quoted in The Wall Street Journal. Interest credited to a
participant's account will accrue, compounded quarterly, at the same rate as
that described in the preceding sentence.
At the time a participant first makes an election to defer the receipt of
fees under the Directors' Plan, the participant may elect that the deferred
fees, together with associated earnings, be distributed in a single payment
or in equal annual installments over a period of two to ten years. At the
participant's election, a distribution will be made, or in the case of
installment payments distributions will begin, on the first business day of
the year immediately following the year during which the participant (1)
ceases to be a member of the board of directors of Cinergy or any of its
subsidiaries, or (2) attains the social security retirement age. Subsequent
installments, if any, will be distributed on the first business day of each
following year.
To the extent deferred fees have been treated as if invested in Cinergy
common stock, distributions from the Directors' Plan will be made, as
determined by Cinergy, in the form of newly issued whole shares of Cinergy
common stock or shares of common stock purchased on the open market, and cash
in lieu of fractional shares. If the participant has elected a single
payment distribution, the number of shares of common stock to be distributed
will equal the number of whole units credited to the participant's account as
of the last business day of the year immediately preceding the year during
which the distribution is to be made. The participant will also receive a
cash payment equal to the fair market value, as of such day, of a fractional
number of shares of common stock equal to any fraction of a unit credited to
the participant's account. If the participant has elected installment
payments, the number of shares of common stock to be distributed will equal
the number of units credited to the participant's account on the day
preceding the date of payment of an installment, divided by the number of
installments remaining to be paid. No fractional shares of common stock will
be distributed; the participant will receive a cash payment, computed by
Cinergy's Treasurer, equal to the fair market value, as of the day preceding
the date of payment of the installment, of a fractional number of shares of
common stock equal to any fraction of a unit to which the participant is
entitled on the installment date. To the extent deferred fees have been
credited as cash to a participant's account, distributions will be made in
the form of cash. If the participant has elected a single payment
distribution, the amount of the distribution will equal the amount of cash
credited to the participant's account as of the last business day of the year
immediately preceding the year of the distribution. If the participant has
elected installment payments, the amount of each installment payment will
equal the amount of cash credited to the participant's account as of the day
preceding the date the installment is to be made, divided by the number of
installments remaining to be paid. Amounts held in the participant's account
pending distribution will continue to accrue interest at the applicable rate.
In general, the Cinergy Board may at any time alter, amend, modify, revoke or
terminate the Directors' Plan, or suspend payment of benefits thereunder.
For further information with respect to the Directors' Plan, reference is
made to Exhibits B-6, C-5 and H-2.
6. 401(k) Plans
CGE and PSI have various 401(k) savings plans which involve the issuance of
shares of Cinergy common stock (and, prior to the Cinergy merger, involved
the issuance of shares of CGE and Resources common stock, respectively) to
participating employees. There is no separate Cinergy 401(k) savings plan.
On the Merger Date, (1) each outstanding share of CGE common stock held by
the CGE 401(k) plans in the CGE common stock fund (described below) was
exchanged for one share of Cinergy common stock, and (2) each outstanding
share of Resources common stock held by the PSI 401(k) plans in the Resources
common stock fund (described below) was exchanged for 1.023 shares of Cinergy
common stock.
The CGE 401(k) plans are the CGE Deferred Compensation and Investment Plan
("CGE DCIP") and the CGE Savings Incentive Plan ("CGE SIP"). These plans are
mirror 401(k) plans. All full-time exempt employees of CGE with one year of
service are eligible to participate in the CGE DCIP. All full-time
non-exempt employees of CGE with one-year of service are eligible to
participate in the CGE SIP.
Both the CGE DCIP and the CGE SIP accept before-tax and after-tax
contributions from employees. Employee contributions are invested according
to employee instructions. An employee may contribute up to 15% of the
employee's salary. One of five investment options is a Cinergy common stock
fund. Contributions invested in the Cinergy common stock fund are used to
purchase authorized but unissued shares of Cinergy common stock. In
addition, CGE matches $.55 per dollar of employee contributions, through the
first 5 percent of the employee's salary. This match is made solely in
shares of Cinergy common stock. Shares of Cinergy common stock acquired
under the CGE DCIP and the CGE SIP are priced at the average of the high and
low prices as reported by the NYSE on the trading day immediately preceding
their acquisition.
For additional information with respect to the CGE 401(k) plans, reference is
made to Exhibits B-7, B-8, C-6, C-7, H-3 and H-4.
The PSI 401(k) plans are the PSI Employees' 401(k) Savings Plan ("PSI
Employees' 401(k)") and the PSI Union Employees' 401(k) Savings Plan ("PSI
Union 401(k)"). These plans are mirror 401(k) plans. All exempt and
non-exempt non-union employees, regardless of length of service, are eligible
to participate in the PSI Employees' 401(k). All union employees, regardless
of length of service, are eligible to participate in the PSI Union 401(k).
Both of PSI's 401(k) plans accept before-tax and after-tax contributions.
Employee contributions are invested according to employee instructions. An
employee may contribute up to 10% of the employee's salary. One of six
investment options is a Cinergy common stock fund. Contributions invested in
the Cinergy common stock fund are used to purchase authorized and unissued
shares of Cinergy common stock or shares of Cinergy common stock on the open
market, as determined by PSI with Cinergy's consent. PSI also matches, in
Cinergy common stock, employees' before-tax contributions in two components:
(1) a base match equal to $.70 for every dollar an eligible employee
contributes, up to the first 4 percent of compensation, and (2) a potential
incentive match equal to $.10 to $.30 for each dollar contributed, up to the
first 4 percent of compensation. The amount of the incentive match depends
on the level of corporate goals achieved. Under both the PSI Employees'
401(k) and the PSI Union 401(k), an employee must meet a nine-month service
requirement in order to be eligible to receive the base match or potential
incentive match. Shares of Cinergy common stock issued under the PSI 401(k)
plans are priced in the same manner as in the case of shares of Cinergy
common stock issued under the CGE 401(k) plans as described above.
For additional information with respect to the PSI 401(k) plans, reference is
made to Exhibits B-9, B-10, C-8, C-9, H-5 and H-6.
D. Statement Pursuant to Rule 54.
Under Rule 54, in determining whether to approve the issue and sale of a
security by a registered holding company for purposes other than the
acquisition of an EWG or a FUCO, or other transactions by such registered
holding company or its subsidiaries other than with respect to EWGs and
FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or a 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 of Rule 53(a)
are and, upon consummation of the proposed transactions, will be satisfied,
and none of the conditions specified 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.
Four Cinergy companies are EWGs or FUCOs: PSI Argentina, Inc. ("PSI
Argentina"), Costanera Power Corporation ("Costanera") and E P EDEGEL, Inc.
("EDEGEL") are EWGs, and PSI Energy Argentina, Inc. ("Energy Argentina") is
a FUCO. For further information with respect to such entities, reference is
made to the Application-Declaration, as amended in File No. 70-8589.
Rule 53(a)(1): The average of Cinergy's consolidated retained earnings for
the four consecutive quarters ended June 30, 1995 was $909 million, and
Cinergy's aggregate investment in EWGs and FUCOs at June 30, 1995 was
approximately $20 million, or approximately 2% of consolidated retained
earnings.
Rule 53(a)(2): Cinergy maintains 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, in English, 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): Less than two percent of the total number of employees of
Cinergy's utility subsidiaries render services, at any one time, to
Costanera, PSI Argentina, EDEGEL and Energy Argentina. Such services have
heretofore been rendered, in part, by employees of PSI 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 Cinergy merger and the
registration of Cinergy as a holding company under the Act. Pursuant to the
Merger Order, Cinergy Services is authorized to provide administrative,
management and other support services to utility and nonutility associate
companies, including those that are EWGs or FUCOs.
Rule 53(a)(4): Cinergy is concurrently submitting a copy of this
Declaration, and will submit copies of any Rule 24 certificates 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 thereof is the subject of
any pending bankruptcy or similar proceeding.
Rule 53(b)(2): Average consolidated retained earnings for the four quarters
ended June 30, 1995 equaled $909 million, versus $979 million for the four
quarters ended June 30, 1994, a difference of approximately $70 million or
7%. Accordingly, the investment restriction set forth in this provision of
the Rule is inapplicable.
Rule 53(b)(3): For the twelve months ended June 30, 1995, Cinergy had net
income of approximately $910,000 attributable to its direct and 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 Rule 53(a) and (b), it is inapplicable here.
Item 2. Fees, Commissions and Expenses.
The fees, commissions and expenses to be incurred, directly or indirectly, by
Cinergy or any associate company thereof in connection with the proposed
transactions are estimated as follows:
U-1 filing fee $ 2,000
Fees of Cinergy Services, Inc. 30,000
TOTAL $32,000
Item 3. Applicable Statutory Provisions.
Sections 6(a) and 7 and Rule 54 are applicable to the proposed transactions.
Item 4. Regulatory Approval.
No state or federal regulatory agency other than the Commission under the Act
has jurisdiction over the proposed transactions.
Item 5. Procedure.
Cinergy requests that the Commission issue and publish in the Federal
Register not later than October [23], 1995 the requisite notice under Rule 23
with respect to the filing of this Declaration and the transactions proposed
herein. Cinergy further requests that such notice specify a date not later
than November [16], 1995 as the date after which the Commission may issue an
order permitting this Declaration to become effective, and that the
Commission issue such order as soon thereafter as practicable.
Cinergy waives a recommended decision by a hearing officer or other
responsible officer of the Commission; consents that the Staff of the
Division of Investment Management may assist in the preparation of the
Commission's order; and requests that there be no waiting period between the
issuance of the Commission's order and its effectiveness.
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
A-1 Certificate of Incorporation of Cinergy (Exhibit to Cinergy's 1993
Form 10-K, filed August 18, 1994, in File No. 1-11377 and hereby incorporated
by reference).
A-2 By-laws of Cinergy as adopted October 24, 1994 (Exhibit to
Cinergy's 1994 Form 10-K, filed March 29, 1995, in File No. 1-11377 and
hereby incorporated by reference).
B-1 Cinergy DRIP (Exhibit to Cinergy's Form S-3 Registration
Statement, filed August 29, 1994, No. 33-55267 ("Cinergy DRIP Registration
Statement"), and hereby incorporated by reference).
B-2 Cinergy Employee Stock Purchase and Savings Plan (Exhibit to
Cinergy's Form S-8 Registration Statement, filed October 19, 1994, No.
33-56091 ("Cinergy Stock Purchase Plan Registration Statement"), and hereby
incorporated by reference).
B-3 Amendment to Cinergy Employee Stock Purchase and Savings Plan,
adopted January 25, 1995, retroactively effective January 1, 1995 (Exhibit to
Cinergy's 1994 Form 10-K, filed March 29, 1995, in File No. 1-11377 and
hereby incorporated by reference).
B-4 Cinergy Performance Shares Plan (Exhibit to Cinergy's Form S-8
Registration Statement, filed October 19, 1994, No. 33-56095 ("Cinergy
Performance Shares Plan Registration Statement"), and hereby incorporated by
reference).
B-5 Cinergy Stock Option Plan (Exhibit to Cinergy's Form S-8
Registration Statement, filed October 19, 1994, No. 33-56093 ("Cinergy Stock
Option Plan Registration Statement"), and hereby incorporated by
reference).
B-6 Cinergy Directors' Deferred Compensation Plan (Exhibit to Cinergy's
Form S-8 Registration Statement, filed October 19, 1994, No. 33-56089
("Cinergy Directors' Plan Registration Statement"), and hereby incorporated
by reference).
B-7 CGE Deferred Compensation and Investment Plan, as amended,
effective January 1, 1989 (Exhibit to Cinergy's Form S-8 Registration
Statement, filed August 30, 1994, No. 33-55291 ("CGE DCIP Registration
Statement"), and hereby incorporated by reference).
B-8 CGE Savings Incentive Plan, as amended, effective January 1, 1989
(Exhibit to Cinergy's Form S-8 Registration Statement, filed August 30, 1994,
No. 33-55293 ("CGE SIP Registration Statement"), and hereby incorporated by
reference).
B-9 PSI Employees' 401(k) Savings Plan, amended and restated October
24, 1994, effective January 1, 1992 (Exhibit to Cinergy's Form S-8
Registration Statement, filed October 18, 1994, No. 33-56067 ("PSI Employees'
401(k) Registration Statement"), and hereby incorporated by reference).
B-10 PSI Union Employees' 401(k) Savings Plan, amended and restated
October 24, 1994, effective January 1, 1992 (Exhibit to Cinergy's Form S-8
Registration Statement, filed October 18, 1994, No. 33-56067 ("PSI Union
Employees' 401(k) Registration Statement"), and hereby incorporated by
reference).
C-1 Cinergy DRIP Registration Statement (see Exhibit B-1).
C-2 Cinergy Stock Purchase Plan Registration Statement (see Exhibit B-2).
C-3 Cinergy Performance Shares Plan Registration Statement (see Exhibit
B-4).
C-4 Cinergy Stock Option Plan Registration Statement (see Exhibit B-5).
C-5 Cinergy Directors' Plan Registration Statement (see Exhibit B-6).
C-6 CGE DCIP Registration Statement (see Exhibit B-7).
C-7 CGE SIP Registration Statement (see Exhibit B-8).
C-8 PSI Employees' 401(k) Registration Statement (see Exhibit B-9).
C-9 PSI Union Employees' 401(k) Registration Statement (see Exhibit B-10).
D Not applicable.
E Not applicable.
F Preliminary opinion of counsel (filed herewith).
G Suggested form of notice of proposed transactions for publication
in Federal Register (filed herewith).
H-1 1994 Form 11-K Annual Report of Cinergy Employee Stock Purchase and
Savings Plan Exhibit to Amendment No. 1 to Cinergy's 1994 Form 10-K, filed
April 28, 1995, in File No. 1-11377 and hereby incorporated by reference).
H-2 1994 Form 11-K Annual Report of Cinergy Directors' Deferred
Compensation Plan (Exhibit to Amendment No. 1 to Cinergy's 1994 Form 10-K,
filed April 28, 1995, in File No. 1-11377 and hereby incorporated by
reference).
H-3 1994 Form 11-K Annual Report of CGE Deferred Compensation and
Investment Plan (Exhibit to Amendment No. 2 to Cinergy's 1994 Form 10-K,
filed June 29, 1995, in File No. 1-11377 and hereby incorporated by
reference).
H-4 1994 Form 11-K Annual Report of CGE Savings Incentive Plan (Exhibit
to Amendment No. 2 to Cinergy's 1994 Form 10-K, filed June 29, 1995, in File
No. 1-11377 and hereby incorporated by reference).
H-5 1994 Form 11-K Annual Report of PSI Employees' 401(k) Savings Plan
(Exhibit to Amendment No. 2 to Cinergy's 1994 Form 10-K, filed June 29, 1995,
in File No. 1-11377 and hereby incorporated by reference).
H-6 1994 Form 11-K Annual Report of PSI Union Employees' 401(k)
Savings Plan (Exhibit to Amendment No. 2 to Cinergy's 1994 Form 10-K, filed
June 29, 1995, in File No. 1-11377 and hereby incorporated by reference).
(b) Financial Statements:
FS-1 Cinergy Consolidated Financial Statements, dated June 30, 1995.
FS-2 Cinergy Financial Statements, dated June 30, 1995.
FS-3 Financial Data Schedules (included in electronic submission only).
Item 7. Information as to Environmental Effects.
(a) The Commission's action in this matter will not constitute major federal
action significantly affecting the quality of the human environment.
(b) No other federal agency has prepared or is preparing an environmental
impact statement with regard to the proposed transactions.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned company has duly
caused this Declaration to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: September 22, 1995
Cinergy Corp.
By: /s/William L. Sheafer
Treasurer
<PAGE>
Endnotes
/1/ The Cinergy stock-based plans consist of the Cinergy Employee Stock
Purchase and Savings Plan, the Cinergy Performance Shares Plan, the Cinergy
Stock Option Plan, and the Cinergy Directors' Deferred Compensation Plan
(collectively, the "Stock Benefit Plans").
/2/ The 401(k) savings plans of PSI and CGE consist of the PSI Union
Employees' 401(k) Savings Plan, the PSI Employees' 401(k) Savings Plan, the
CGE Deferred Compensation and Investment Plan and the CGE Savings Incentive
Plan (collectively, the " 401(k) Plans" and, together with the DRIP and the
Stock Benefit Plans, the "Plans").
/3/ Such shares were issued and sold in the following respective amounts per
Plan: (i) DRIP - 973,697 ; (ii) Employee Stock Purchase and Savings Plan -
67,306 ; (iii) Performance Shares Plan - 28,207 ; (iv) Stock Option Plan -
334,170 ; (v) Directors' Deferred Compensation Plan - 0 ; (vi) PSI Union
401(k) Plan - 122,622; (vii) PSI Employees' 401(k) Plan - 186,545 ; (viii)
CGE DCIP - 441,006 ; and (ix) CGE SIP - 459,751
EXHIBIT F
September 22, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
I am Senior Counsel of Cinergy Services, Inc., the service company
subsidiary of Cinergy Corp. ("Cinergy"), and am furnishing this opinion as an
exhibit to Cinergy's Form U-1 Declaration filed with the Commission concurrently
herewith under the Public Utility Holding Company Act of 1935 (the "Act")
requesting authorization for Cinergy to issue (or purchase on the open
market) and sell under Cinergy's Dividend Reinvestment and Stock Purchase
Plan, various Cinergy stock-based employee benefit plans and the 401(k)
savings plans of Cinergy's subsidiaries, The Cincinnati Gas & Electric
Company and PSI Energy, Inc.(collectively, the "Plans"), from time to time
through December 31, 2000, (1) the remaining shares of Cinergy common stock,
$.01 par value per share, that are the subject of the Commission's order
dated October 21, 1994 in File No. 70-8427 (Rel. No. 35-26146), consisting of
7,386,696 shares at September 1, 1995 (the "Remaining Shares"), and (2) up to
an additional 15 million shares of Cinergy common stock (the "Additional
Shares" and, together with the Remaining Shares, the "Shares").
In connection with this opinion, I have reviewed or caused to be reviewed
the Declaration and such other documents and records as I deemed necessary or
appropriate in order to give this opinion.
The transactions proposed in the Declaration are subject to (1) receipt of
an appropriate order or orders of the Commission under the Act, and (2) due
issuance of the Shares (in the case of Shares not purchased on the open market)
and receipt of full payment therefor.
Subject to the foregoing, I am of the opinion that in the event that the
proposed transactions are consummated in accordance with the Declaration
(including as it may hereafter be amended):
(a) All state laws applicable to the proposed transactions will have been
complied with.
(b) Cinergy is validly organized and duly existing under the laws of the
State of Delaware.
(c) Those Shares to be purchased on the open market on behalf of the
participants in the Plans are validly issued, fully paid and nonassessable.
Those Shares to be issued directly by Cinergy to participants in the Plans
will be validly issued, fully paid and nonassessable. In both cases, the
holders thereof will be entitled to the rights and privileges appertaining
thereto set forth in Cinergy's Certificate of Incorporation.
(d) The consummation of the proposed transactions will not violate the
legal rights of the holders of any securities issued by Cinergy or any associate
company thereof.
I am a member of the Ohio Bar and do not hold myself out as an expert on
the laws of any other state. As to matters involving the laws of the State of
Delaware, I have made or caused to be made a study of such laws to the extent
relevant to this opinion. This opinion does not address the potential
applicability to the proposed transactions of any state securities or Blue
Sky laws.
I hereby consent to the filing of this opinion as an exhibit to the
Declaration.
Very truly yours,
/s/ Jerome A. Vennemann
Senior Counsel
<PAGE>
EXHIBIT G
PROPOSED FORM OF NOTICE
Cinergy Corp. 70-
Notice of Proposal to Extend Authorization and to Issue Additional Shares of
Common Stock under Dividend Reinvestment, Stock-Based Employee Benefit and
401(k) Savings Plans
Cinergy Corp., a registered holding company ("Cinergy"), has filed a
declaration under Sections 6(a) and 7 of the Act and Rule 54 thereunder.
By order dated October 21, 1994 in File No. 70-8427 (Rel. No. 35-26146) (the
"Merger Order"), the Commission authorized Cinergy, through December 31, 1995,
to issue (and/or acquire in open market transactions) and sell up to 10
million shares of Cinergy common stock, $.01 par value per share, to the
Cinergy Dividend Reinvestment and Stock Purchase Plan, certain Cinergy
stock-based employee benefit plans, and the 401(k) savings plans of Cinergy's
subsidiaries, The Cincinnati Gas & Electric Company and PSI Energy, Inc.
(collectively, "Plans"). As of September 1, 1995, Cinergy had issued (or, in
the case of open market transactions, had acquired on behalf of plan
participants) and sold to the Plans a total of 2,613,304 shares of common
stock pursuant to the Merger Order.
Cinergy now seeks Commission authorization to issue (or, in the case of
shares purchased on the open market, to acquire on behalf of plan
participants) and sell under the Plans, from time to time through December
31, 2000, (1) the remaining shares of common stock covered under the Merger
Order, consisting of 7,386,696 shares at September 1, 1995, and (2) up to an
additional 15 million shares of Cinergy common stock.
Cinergy proposes to use the proceeds from sales of the remaining and
additional shares for general corporate purposes, including repayment of
short-term indebtedness and investments in subsidiary companies. Without
further authorization from the Commission, none of such proceeds will be used
to acquire an interest in any "exempt wholesale generator" or "foreign
utility company" as defined in the Act.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
CINERGY CORP.
CONSOLIDATED
AS OF JUNE 30, 1995
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual
Adjustments Pro Forma
(in thousands, except
per share amounts)
<S> <C> <C>
<C>
OPERATING REVENUES
Electric $2,478,494
$2,478,494
Gas 383,868
383,868
2,862,362
- 2,862,362
OPERATING EXPENSES
Fuel used in electric production 723,749
723,749
Gas purchased 192,327
192,327
Purchased and exchanged power 31,155
31,155
Other operation 567,004
567,004
Maintenance 193,764
193,764
Depreciation 291,043
291,043
Amortization of phase-in deferrals 2,273
2,273
Post-in-service deferred operating
expenses -- net (5,090)
(5,090)
Taxes
Federal and state income 158,951
158,951
State, local and other 247,216
247,216
2,402,392
- 2,402,392
OPERATING INCOME 459,970
- 459,970
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction 3,755
3,755
Post-in-service carrying costs 8,055
8,055
Phase-in deferred return 8,161
8,161
Income taxes 9,654
9,654
Other - net (21,609)
(21,609)
8,016
- 8,016
INCOME BEFORE INTEREST AND OTHER CHARGES 467,986
- 467,986
INTEREST AND OTHER CHARGES
Interest on long-term debt 215,748
215,748
Other interest 23,639
23,639
Allowance for borrowed funds used
during construction (10,542)
(10,542)
Preferred dividend requirements of
subsidiaries 34,630
34,630
263,475
- 263,475
NET INCOME $204,511
- $204,511
AVERAGE COMMON SHARES OUTSTANDING 152,331
22,874 175,205
EARNINGS PER COMMON SHARE $1.33
$1.17
DIVIDENDS DECLARED PER COMMON SHARE $1.60
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT JUNE 30, 1995
ASSETS
Pro Forma
Actual
Adjustments Pro Forma
(in
thousands)
<S> <C> <C>
<C>
UTILITY PLANT - ORIGINAL COST
In service
Electric $8,393,518
$8,393,518
Gas 664,536
664,536
Common 184,750
184,750
9,242,804
- 9,242,804
Accumulated depreciation 3,262,715
3,262,715
5,980,089
- 5,980,089
Construction work in progress 241,987
241,987
Total utility plant 6,222,076
- 6,222,076
CURRENT ASSETS
Cash and temporary cash investments 25,206
600,453 625,659
Restricted deposits 4,646
4,646
Accounts receivable less accumulated
provision of $10,212,000 251,888
251,888
Materials, supplies and fuel
- at average cost
Fuel for use in electric production 160,363
160,363
Gas stored for current use 21,187
21,187
Other materials and supplies 93,722
93,722
Property taxes applicable to subsequent year 134,729
134,729
Prepayments and other 46,947
46,947
738,688
600,453 1,339,141
OTHER ASSETS
Regulatory Assets
Post-in-service carrying costs and
deferred operating expenses 188,061
188,061
Phase-in deferred return and depreciation 105,211
105,211
Deferred demand-side management costs 114,768
114,768
Amounts due from customers - income taxes 393,859
393,859
Deferred merger costs 50,067
50,067
Unamortized costs of reacquiring debt 71,778
71,778
Other 81,665
81,665
Other 141,581
141,581
1,146,990
- 1,146,990
$8,107,754
$600,453 $8,708,207
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT JUNE 30, 1995
<S> <C> <C>
<C>
CAPITALIZATION AND LIABILITIES
Pro Forma
Actual
Adjustments Pro Forma
(dollars in
thousands)
COMMON STOCK EQUITY
Common stock - $.01 par value;
Authorized shares - 600,000,000
Outstanding shares - 156,567,331 Actual
and 179,441,740 Pro Forma $1,566
$229 $1,795
Paid-in capital 1,570,873
600,224 2,171,097
Retained earnings 900,094
900,094
Total common stock equity 2,472,533
600,453 3,072,986
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES
Not subject to mandatory redemption 227,915
227,915
Subject to mandatory redemption 160,000
160,000
LONG-TERM DEBT 2,652,382
2,652,382
Total capitalization 5,512,830
600,453 6,113,283
CURRENT LIABILITIES
Long-term debt and preferred stock
of subsidiaries due within one year 150,400
150,400
Notes payable 244,000
244,000
Accounts payable 184,400
184,400
Refund due to customers 15,796
15,796
Litigation settlement 80,000
80,000
Accrued taxes 261,787
261,787
Accrued interest 56,740
56,740
Other 39,544
39,544
1,032,667
- 1,032,667
OTHER LIABILITIES
Deferred income taxes 1,074,724
1,074,724
Unamortized investment tax credits 190,804
190,804
Accrued pension and other postretirement
benefit costs 153,753
153,753
Other 142,976
142,976
1,562,257
- 1,562,257
$8,107,754
$600,453 $8,708,207
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual
Adjustments Pro Forma
(in
thousands)
<S> <C> <C>
<C>
BALANCE JULY 31, 1994 $943,659
$943,659
Net income 204,511
204,511
Dividends on common stock (243,797)
(243,797)
Other (4,279)
(4,279)
BALANCE JUNE 30, 1995 $900,094
- $900,094
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
Pro Forma Consolidated Journal Entries to Give Effect to the
Issuance of 22,874,409* Shares of Common Stock, $.01 par value per share
<S> <C>
<C>
Entry No. 1
Cash and temporary cash investments
$600,453,236
Common stock
$228,744
Paid-in capital
600,224,492
<FN>
To record the issuance of 22,874,409 shares of common stock at the June 30,
1995, close
price of $26-1/4 per share.
* Consists of 10,000,000 shares of common stock authorized October 21, 1994,
less 2,125,591
shares issued through June 30, 1995, plus the current request for authority to
issue an
additional 15,000,000 shares.
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
CINERGY CORP.
AS OF JUNE 30, 1995
(Unaudited)
Pages 1 through 5
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual
Adjustments Pro Forma
(in thousands, except
per share amounts)
<S> <C> <C>
<C>
OPERATING EXPENSES
Other operation $921
$921
Taxes
Federal and state income (145)
(145)
State, local and other 42
42
818
- 818
OPERATING INCOME (818)
- (818)
OTHER INCOME AND EXPENSES - NET
Equity in earnings of subsidiaries 207,951
207,951
Income taxes 1,914
1,914
Other - net (1,789)
(1,789)
208,076
- 208,076
INCOME BEFORE INTEREST AND OTHER CHARGES 207,258
- 207,258
INTEREST 2,747
2,747
NET INCOME $204,511
- $204,511
AVERAGE COMMON SHARES OUTSTANDING 152,331
22,874 175,205
EARNINGS PER COMMON SHARE $1.33
$1.17
DIVIDENDS DECLARED PER COMMON SHARE $1.60
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA BALANCE SHEET
AT JUNE 30, 1995
ASSETS
Pro Forma
Actual
Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C>
<C>
CURRENT ASSETS
Cash and temporary cash investments $10,834
$600,453 $611,287
Accounts receivable 9,926
9,926
20,760
600,453 621,213
OTHER ASSETS
Investment in subsidiaries 2,475,328
2,475,328
Other 146
146
2,475,474
- 2,475,474
$2,496,234
$600,453 $3,096,687
CAPITALIZATION AND LIABILITIES
COMMON STOCK EQUITY
Common stock - $.01 par value;
Authorized shares - 600,000,000
Outstanding shares - 156,567,331 Actual
and 179,441,740 Pro Forma $1,566
$229 $1,795
Paid-in capital 1,570,873
600,224 2,171,097
Retained earnings 900,094
900,094
Total common stock equity 2,472,533
600,453 3,072,986
Total capitalization 2,472,533
600,453 3,072,986
CURRENT LIABILITIES
Notes payable 21,000
21,000
Accounts payable 3,070
3,070
Accrued taxes (268)
(268)
Accrued interest 156
156
23,958
- 23,958
OTHER LIABILITIES
Deferred income taxes (258)
(258)
Other 1
1
(257)
- (257)
$2,496,234
$600,453 $3,096,687
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual
Adjustments Pro Forma
(in thousands)
<S> <C> <C>
<C>
BALANCE JULY 31, 1994 $943,659
$943,659
Net income 204,511
204,511
Dividends on common stock (243,797)
(243,797)
Other (4,279)
(4,279)
BALANCE JUNE 30, 1995 $900,094
- $900,094
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
Pro Forma Journal Entries to Give Effect to the
Issuance of 22,874,409* Shares of Common Stock, $.01 par value per share
<S> <C>
<C>
Entry No. 1
Cash and temporary cash investments
$600,453,236
Common stock
$228,744
Paid-in capital
600,224,492
<FN>
To record the issuance of 22,874,409 shares of common stock at the June 30,
1995, close
price of $26-1/4 per share.
* Consists of 10,000,000 shares of common stock authorized October 21, 1994,
less 2,125,591
shares issued through June 30, 1995, plus the current request for authority to
issue an
additional 15,000,000 shares.
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000899652
<NAME> CINERGY CORP.
<SUBSIDIARY>
<NUMBER> 0
<NAME> CINERGY CORP. (CONSOLIDATED)
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-START> JUN-30-1994 JUN-30-1994
<PERIOD-END> JUN-30-1995 JUN-30-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6,222,076 6,222,076
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 738,688 1,339,141
<TOTAL-DEFERRED-CHARGES> 1,005,409 1,005,409
<OTHER-ASSETS> 141,581 141,581
<TOTAL-ASSETS> 8,107,754 8,708,207
<COMMON> 1,566 1,795
<CAPITAL-SURPLUS-PAID-IN> 1,570,873 2,171,097
<RETAINED-EARNINGS> 900,094 900,094
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,472,533 3,072,986
160,000 160,000
227,915 227,915
<LONG-TERM-DEBT-NET> 2,652,382 2,652,382
<SHORT-TERM-NOTES> 244,000 244,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 60,400 60,400
90,000 90,000
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,200,524 2,200,524
<TOT-CAPITALIZATION-AND-LIAB> 8,107,754 8,708,207
<GROSS-OPERATING-REVENUE> 2,862,362 2,862,362
<INCOME-TAX-EXPENSE> 158,951 158,951
<OTHER-OPERATING-EXPENSES> 2,243,441 2,243,441
<TOTAL-OPERATING-EXPENSES> 2,402,392 2,402,392
<OPERATING-INCOME-LOSS> 459,970 459,970
<OTHER-INCOME-NET> 8,016 8,016
<INCOME-BEFORE-INTEREST-EXPEN> 467,986 467,986
<TOTAL-INTEREST-EXPENSE> 228,845 228,845
<NET-INCOME> 239,141 239,141
34,630 34,630
<EARNINGS-AVAILABLE-FOR-COMM> 204,511 204,511
<COMMON-STOCK-DIVIDENDS> 243,797 243,797
<TOTAL-INTEREST-ON-BONDS> 215,748 215,748
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 1.33 1.17
<EPS-DILUTED> 1.33 1.17
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000899652
<NAME> CINERGY CORP.
<SUBSIDIARY>
<NUMBER> 1
<NAME> CINERGY CORP.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-START> JUN-30-1994 JUN-30-1994
<PERIOD-END> JUN-30-1995 JUN-30-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 2,475,328 2,475,328
<TOTAL-CURRENT-ASSETS> 20,760 621,213
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 146 146
<TOTAL-ASSETS> 2,496,234 3,096,687
<COMMON> 1,566 1,795
<CAPITAL-SURPLUS-PAID-IN> 1,570,873 2,171,097
<RETAINED-EARNINGS> 900,094 900,094
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,472,533 3,072,986
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 21,000 21,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,701 2,701
<TOT-CAPITALIZATION-AND-LIAB> 2,496,234 3,096,687
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (145) (145)
<OTHER-OPERATING-EXPENSES> 963 963
<TOTAL-OPERATING-EXPENSES> 818 818
<OPERATING-INCOME-LOSS> (818) (818)
<OTHER-INCOME-NET> 208,076 208,076
<INCOME-BEFORE-INTEREST-EXPEN> 207,258 207,258
<TOTAL-INTEREST-EXPENSE> 2,747 2,747
<NET-INCOME> 204,511 204,511
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 204,511 204,511
<COMMON-STOCK-DIVIDENDS> 243,797 243,797
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 1.33 1.17
<EPS-DILUTED> 1.33 1.17
