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 & Electric Company
139 East Fourth Street
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.
-------------------------------------
Transaction Overview
- --------------------
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). CG&E hereby proposes to enter into a transaction
prior to June 30, 1996 involving a sale of equipment not to exceed $40
million, depending on the aggregate appraised value. The equipment
shall include gas combustion turbines and related equipment such as,
but not limited to, transformers, boilers and water pumps, of Unit Nos.
1 and 7 at CG&E's Woodsdale Generating Station (Woodsdale)
(collectively, Equipment).
Woodsdale is gas combustion turbine electric generating station
located in southwestern Ohio and is wholly owned by CG&E. Woodsdale
Unit Nos. 1 through 6 are in operation. Woodsdale Unit No. 7 is under
construction and is expected to be in service in 1998 based on current
estimates. Woodsdale Unit No. 1 has a net generating capability of 82
megawatts and Woodsdale Unit No. 7 is expected to have 109 megawatts of
net generating capability when completed.
The sale by CG&E will be limited to equipment that constitutes
moveable property and will exclude certain property retained by CG&E,
such as land, buildings, pollution control facilities, and other non-
moveable property. The Equipment shall include equipment in service
and equipment under construction at the time of sale.
Sale Terms
- ----------
Depending on the appraised value, the Equipment is not expected to
be sold for more than $40 million. All sale proceeds will be due and
payable at the time of closing.
CG&E anticipates the Equipment to be sold to a third party finance
lessor who will concurrently enter into a leaseback of the Equipment.
CG&E is filing for approval of the leaseback of the Equipment with the
Public Utilities Commission of Ohio (PUCO), CG&E's state commission.
Accordingly, authorization for the leaseback of Equipment is not being
sought in this Application due to the PUCO having jurisdiction over
such transaction pursuant to Section 9(b)(1).
After approval of the sale terms by CG&E's Board of Directors or
by Company officers authorized by CG&E's Board of Directors, it is
anticipated that an agreement setting forth the terms of the sale would
be executed in substantially the form of Exhibit B as filed herewith.
The authorization of the sale of the Equipment in no way relieves
CG&E of its responsibility to obtain the best terms available for the
transaction and, therefore, it is appropriate and reasonable for this
Commission to authorize CG&E to agree to the proposed sale terms.
Use of Sale Proceeds
- --------------------
CG&E proposes to use the net proceeds from the sale of the
Equipment either for (a) the redemption, in whole or in part, prior to
maturity, of one or more series of CG&E's outstanding first mortgage
bonds, pursuant to the provisions of CG&E's First Mortgage dated as of
August 1, 1936, with The Bank of New York, as trustee, as supplemented
and amended, (b) repayment of short-term debt incurred in connection
with such redemption, or (c) other general corporate purposes.
CG&E is currently considering the redemption, in whole or in part,
of its First Mortgage Bonds, 10.20% Series due December 1, 2020, which
are callable beginning December 1, 1995. The proposed redemption of
high cost first mortgage bonds using the equipment sale proceeds is
anticipated to result in greater cost savings than might otherwise be
achieved were CG&E to issue and sell other securities to fund the
redemption over a correspondingly long lease term.
Statement Pursuant to Rule 54
- -----------------------------
CG&E does not intend at present to use the sale proceeds proposed
herein to finance the acquisition of an EWG or a FUCO. If CG&E's
intention changes, an amended Declaration or separate filing under the
Act will be submitted requesting authorization for such use.
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.
Three Cinergy companies are EWGs or FUCOs: PSI Argentina, Inc.
("PSI Argentina") and Costanera Power Corporation ("Costanera") 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 and Energy Argentina. Such services
have heretofore been rendered, in part, by employees of PSI Energy,
Inc., 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 Commission's order
dated October 21, 1994 in File No. 70-8427, Cinergy Services, Inc., 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.
-------------------------------
Expenses of CG&E in connection with the proposed sale are expected
to be minimal, being limited to the Form U-1 filing fee of $2,000 and
miscellaneous out of pocket expenses to transact the sale, currently
estimated to not exceed $10,000. No other fees, commissions or
expenses, other than expenses billed at cost by Cinergy Services, Inc.,
not to exceed $20,000, are to be paid or incurred by CG&E or any
associate company in connection with the proposed transaction.
Item 3. Applicable Statutory Provisions
-------------------------------
CG&E believes that the proposed sale of the Equipment is subject
to Section 12(d) of the Act and Rule 44 thereunder.
Item 4. Regulatory Approval.
--------------------
No state or federal regulatory agency other than the Commission
under the Act has jurisdiction over the proposed sale of Equipment and
redemption of securities. Approval of the leaseback is being sought
with the PUCO. A copy of the PUCO order will be filed by amendment
hereto.
Item 5. Procedure.
----------
CG&E hereby respectfully requests that the Commission issue and
publish not later than October 26, 1995, the requisite notice under
Rule 23 with respect to the filing of this Declaration, and that the
Commission enter not later than November 21, 1995, an appropriate order
permitting this Declaration to become effective.
CG&E hereby waives a recommended decision by a hearing officer or
any other responsible officer of the Commission; agrees that the Staff
of the Division of Investment Management may assist in the preparation
of the Commission's decision; and requests 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 Not Applicable.
B Form of Bill of Sale.
C Not Applicable.
D Copy of Order of The Public Utilities
Commission of Ohio (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 June 30, 1995.
FS-2 CG&E Unaudited Pro Forma Consolidated
Statement of Income for the Twelve Months
Ended June 30, 1995.
FS-3 CG&E Unaudited Pro Forma Consolidated
Statement of Changes in Retained Earnings
for the Twelve Months Ended June 30, 1995.
FS-4 CG&E Pro Forma Consolidated Journal Entries
to give effect to the sale of equipment and
redemption of outstanding debt securities.
FS-5 Cinergy Unaudited Pro Forma Consolidated
Balance Sheet at June 30, 1995.
FS-6 Cinergy Unaudited Pro Forma Consolidated
Statement of Income for the Twelve Months
Ended June 30, 1995.
FS-7 Cinergy Unaudited Pro Forma Consolidated
Statement of Changes in Retained Earnings
for the Twelve Months Ended June 30, 1995.
FS-8 Cinergy Pro Forma Consolidated Journal
Entries to give effect to the sale of
equipment and redemption of outstanding debt
securities.
FS-9 Financial Data Schedule for CG&E (included in
electronic transmission only).
FS-10 Financial Data Schedule for Cinergy (included
in electronic transmission only).
Item 7. Information as to Environmental Effects.
----------------------------------------
In light of the transactions proposed in this Declaration, the
Commission's action in this matter will not constitute any major
federal action significantly affecting the quality of the human
environment.
No other federal agency has prepared or is preparing an
environmental impact statement with regard 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
Dated: October 12, 1995
EXHIBIT B
[FORM OF BILL OF SALE]
KNOW ALL MEN BY THESE PRESENTS THAT ___________________ ("Seller"), for
and in consideration of the sum of $10.00 and other good and valuable
consideration, in hand paid by _________________________, not in its
individual capacity, but solely as Owner Trustee under that certain
Trust Agreement dated as of ___, ___ ("Purchaser"), the receipt of
which is hereby acknowledged, grants, bargains, sells, conveys,
transfers and delivers unto Purchaser, its successors and assigns
forever all right, title and interest of Seller in and to the equipment
described on Schedule A attached hereto and made a part hereof (the
"Equipment"), free and clear of any and all liens, claims, charges and
encumbrances.
Seller does hereby agree to and with Purchaser, its successors and
assigns, to warrant and defend title to the aforesaid Equipment hereby
sold unto Purchaser, its successors and assigns against all and every
person and persons whomsoever.
Seller hereby represents and warrants to Purchaser that Seller is the
record and beneficial owner of such Equipment and that Seller has full
right, power and authority to sell the Equipment and to make this Bill
of Sale.
Seller, for itself and it s successors and assigns further covenants
and agrees to do, execute and deliver, or to cause to be done, executed
or delivered, all such further acts, transfers and assurances, for the
better assuring, conveying and confirming unto Purchaser and its
successors and assigns the rights and interests in the Equipment hereby
bargained, sold, assigned, transferred, set over and conveyed, as
Purchaser and its successors and assigns shall reasonably request.
This Bill of Sale and the representations, warranties and covenants
herein contained shall inure to the benefit of Purchaser and its
successors and assigns, shall be binding upon Seller and its
successors, assigns and transferees, and shall survive the execution
and delivery hereof.
IN WITNESS WHEREOF, Seller has hereunto set its hand by an officer as
of this _____ day of ______, ______.
__________________________________________
By:______________________________________
Title:______________________________________
EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
October __, 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 November 20, 1995, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant and/or declarant 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) 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). CG&E hereby proposes to enter into a transaction
prior to June 30, 1996 involving a sale of equipment not to exceed $40
million, depending on the aggregate appraised value. The equipment
shall include gas combustion turbines and related equipment such as,
but not limited to, transformers, boilers and water pumps, of Unit Nos.
1 and 7 at CG&E's Woodsdale Generating Station (Woodsdale)
(collectively, Equipment).
Woodsdale is gas combustion turbine electric generating station
located in southwestern Ohio and is wholly owned by CG&E. Woodsdale
Unit Nos. 1 through 6 are in operation. Woodsdale Unit No. 7 is under
construction and is expected to be in service in 1998 based on current
estimates. Woodsdale Unit No. 1 has a net generating capability of 82
megawatts and Woodsdale Unit No. 7 is expected to have 109 megawatts of
net generating capability when completed.
The sale by CG&E will be limited to equipment that constitutes
moveable property and will exclude certain property retained by CG&E,
such as land, buildings, pollution control facilities, and other non-
moveable property. The Equipment shall include equipment in service
and equipment under construction at the time of sale.
Depending on the appraised value, the Equipment is not expected to
be sold for more than $40 million. All sale proceeds will be due and
payable at the time of closing. CG&E anticipates the Equipment to be
sold to a third party finance lessor who will concurrently enter into a
leaseback of the Equipment.
CG&E proposes to use the net proceeds from the sale of the
Equipment either for (a) the redemption, in whole or in part, prior to
maturity, of one or more series of CG&E's outstanding first mortgage
bonds, pursuant to the provisions of CG&E's First Mortgage dated as of
August 1, 1936, with The Bank of New York, as trustee, as supplemented
and amended, (b) repayment of short-term debt incurred in connection
with such redemption, or (c) other general corporate purposes.
CG&E is currently considering the redemption, in whole or in part,
of its First Mortgage Bonds, 10.20% Series due December 1, 2020, which
are callable beginning December 1, 1995. The proposed redemption of
high cost first mortgage bonds using the equipment sale proceeds is
anticipated to result in greater cost savings than might otherwise be
achieved were CG&E to issue and sell other securities to fund the
redemption over a correspondingly long lease term.
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
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995
ASSETS
Pro Forma
Actual Adjustments Pro Forma
------------ ----------- ------------
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric $ 4,530,815 $ (21,516) $ 4,509,299
Gas 664,536 664,536
Common 184,750 184,750
------------ -------------- --------------
5,380,101 (21,516) 5,358,585
Accumulated depreciation 1,665,213 (3,120) 1,662,093
------------ -------------- --------------
3,714,888 (18,396) 3,696,492
Construction work in progress 74,400 (3,329) 71,071
------------ -------------- --------------
Total utility plant 3,789,288 (21,725) 3,767,563
------------ -------------- --------------
CURRENT ASSETS
Cash and temporary cash investments 3,500 1,787 5,287
Restricted deposits 100 100
Accounts receivable - net 217,774 217,774
Materials, supplies and fuel --
at average cost
Fuel for use in electric production 40,555 40,555
Gas stored for current use 21,187 21,187
Other materials and supplies 58,150 58,150
Property taxes applicable to subsequent year 134,729 134,729
Prepayments and other 42,206 42,206
------------ -------------- --------------
518,201 1,787 519,988
------------ -------------- --------------
OTHER ASSETS
Regulatory Assets
Post-in-service carrying costs and deferred
operating expenses 151,727 151,727
Phase-in deferred return and depreciation 105,211 105,211
Deferred demand-side management costs 14,246 14,246
Amounts due from customers -- income taxes 366,924 366,924
Deferred merger costs 12,437 12,437
Unamortized costs of reacquiring debt 36,041 36,041
Other 49,893 49,893
Other 49,969 (22) 49,947
------------ -------------- --------------
786,448 (22) 786,426
------------ -------------- --------------
$ 5,093,937 $ (19,960) $ 5,073,977
============ ============== ==============
<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
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995
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 339,135 339,135
Retained earnings 427,623 $ 843 428,466
------------ ------------- ------------
Total common stock equity 1,528,894 843 1,529,737
CUMULATIVE PREFERRED STOCK
Not subject to mandatory redemption 40,000 40,000
Subject to mandatory redemption 160,000 160,000
LONG-TERM DEBT 1,774,404 (20,803) 1,753,601
------------ ------------- -------------
Total capitalization 3,503,298 (19,960) 3,483,338
------------ ------------- -------------
CURRENT LIABILITIES
Preferred stock due within one year 90,000 90,000
Notes payable 13,500 13,500
Accounts payable 85,830 85,830
Accrued taxes 234,609 234,609
Accrued interest 30,572 30,572
Other 35,709 35,709
------------ -------------
490,220 490,220
------------ -------------
OTHER LIABILITIES
Deferred income taxes 744,678 744,678
Unamortized investment tax credits 132,440 132,440
Accrued pension and other
postretirement benefit costs 110,947 110,947
Other 112,354 112,354
------------ -------------
1,100,419 1,100,419
------------ ------------- -------------
$ 5,093,937 $ (19,960) $ 5,073,977
============ ============= =============
<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
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- ------------
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Electric $ 1,369,201 $ 1,369,201
Gas 383,868 383,868
------------ -----------
1,753,069 1,753,069
------------ -----------
OPERATING EXPENSES
Fuel used in electric production 332,578 332,578
Gas purchased 192,327 192,327
Purchased and exchanged power 30,818 30,818
Other operation 333,300 333,300
Maintenance 98,987 98,987
Depreciation 158,080 $ (936) 157,144
Amortization of phase-in deferrals 2,273 2,273
Post-in-service deferred
operating expenses -- net 3,290 3,290
Income taxes 107,022 454 107,476
Taxes other than income taxes 199,231 199,231
------------ ------------- -----------
1,457,906 (482) 1,457,424
------------ ------------- -----------
OPERATING INCOME 295,163 482 295,645
------------ ------------- -----------
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds
used during construction 1,956 1,956
Phase-in deferred return 8,161 8,161
Income taxes 5,913 5,913
Other - net (6,455) (6,455)
------------ -----------
9,575 9,575
------------ ------------- -----------
INCOME BEFORE INTEREST 304,738 482 305,220
------------ ------------- -----------
INTEREST
Interest on long-term debt 144,609 (361) 144,248
Other interest 3,376 3,376
Allowance for borrowed funds used during
construction (3,547) (3,547)
------------ ------------- -----------
144,438 (361) 144,077
------------ ------------- -----------
NET INCOME 160,300 843 161,143
PREFERRED DIVIDEND REQUIREMENT 21,449 21,449
------------ ------------- -----------
INCOME APPLICABLE TO COMMON STOCK $ 138,851 $ 843 $ 139,694
============ ============= ===========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
[DESCRIPTION] Exhibit FS-3 to Form U-1
<TABLE>
<CAPTION>
Exhibit FS-3
Financial Statements
Page 1 of 1
THE CINCINNATI GAS & ELECTRIC COMPANY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual Adjustments Pro Forma
------------ ---------- ----------
(dollars in thousands)
<S> <C> <C> <C>
Balance, July 1, 1994 $ 483,564 $ 483,564
Net income 160,300 $ 843 161,143
Dividends on preferred stock (21,449) (21,449)
Dividends on common stock (190,521) (190,521)
Other (4,271) (4,271)
------------ ---------- -----------
Balance, June 30, 1995 $ 427,623 $ 843 $ 428,466
============ ========== ===========
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-4 of this filing.
</TABLE>
Exhibit FS-4
Financial Statements
Page 1 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
1) Cash $ 22,661,601
Accumulated depreciation 2,183,897
Utility plant in-service - electric $ 21,516,230
Construction work in progress $ 3,329,268
To record the sale at net book value of equipment in service and under
construction at Woodsdale Generating Station Unit Nos. 1 and 7 of The
Cincinnati Gas & Electric Company (CG&E).
2) Long-term debt - First Mortgage Bonds $ 21,000,000
Cash $ 21,000,000
To record the redemption of $21,000,000 principal amount CG&E's First
Mortgage Bonds, 10.20% Series due December 1, 2020.
3) Loss on reacquired debt $ 1,790,204
Discount on long-term debt $ 205,515
Unamortized debt expense $ 22,289
Cash $ 1,562,400
To record CG&E's loss on redemption of $21,000,000 principal amount of
First Mortgage Bonds, 10.20% Series Due 2020 at 107.44%.
Calculations are as follows:
Princpal amount $ 21,000,000
Discount on long-term debt 205,515
Unamortized debt expense 22,289
-------------
Carrying amount $ 20,772,196
=============
Redemption price % 107.44%
Redemption price $ 22,562,400
Estimated loss on redemption $ 1,790,204
Exhibit FS-4
Financial Statements
Page 2 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
4) Cash $ 2,142,000
Interest on long-term debt $ 2,142,000
To record CG&E's decrease in annual interest expense from retiring first
mortgage bonds.
Calculation is as follows: Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds:
10.20% Series Due 2020 $ 21,000,000 10.20% $ 2,142,000
============= =============
5) Discount on long-term debt $ 8,088
Unamortized debt expense $ 852
Amortization of debt discount $ 8,088
Amortization of debt expense $ 852
To record CG&E's decrease in annual amortization of debt discount and
expense from retiring first mortgage bonds.
Calculation is as follows:
Original
at Life of Annual
Issuance Issue Amortization
------------- ------------- -------------
First Mortgage Bonds
10.20% Series Due 2020
----------------------
Debt Discount $ 242,550 30 Years $ 8,088
============= =============
Debt Expense $ 25,554 30 Years $ 852
============= =============
Exhibit FS-4
Financial Statements
Page 3 of 3
THE CINCINNATI GAS & ELECTRIC COMPANY
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
6) Accumulated depreciation $ 935,956
Depreciation $ 935,956
To record CG&E's reduction in annual depreciation expense for equipment
in-service at time of sale.
Calculation is as follows:
Plant in service at time of sale $ 21,516,230
Assumed Depreciation Rate 4.35%
-------------
$ 935,956
=============
7) Income tax expense $ 453,842
Cash $ 453,842
To record the impact on income tax expense from CG&E transacting the sale
of equipment and redeeming first mortgage bonds with sale cash proceeds.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Depreciation $ 935,956
Interest expense 2,142,000
Amortization of discount on long-term debt 8,088
Amortization of expense on long-term debt 852
Loss on reacquired debt (1,790,204)
-------------
Net impact on income $ 1,296,692
=============
Impact on income taxes at
assumed rate of 35% $ 453,842
=============
NOTES:
(a) Excess proceeds, if any, after redeeming securities will be used
for general and corporate purposes.
(b) For purposes of pro-forma financial statements, out-of-pocket
transaction costs and impact on Allowance for Funds have been
ignored.
<TABLE>
<CAPTION>
Exhibit FS-5
Financial Statements
Page 1 of 2
CINERGY CORP.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995
ASSETS
Pro Forma
Actual Adjustments Pro Forma
------------ ------------- -------------
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric $ 8,393,518 $ (21,516) $ 8,372,002
Gas 664,536 664,536
Common 184,750 184,750
------------ ------------- -------------
9,242,804 (21,516) 9,221,288
Accumulated depreciation 3,262,715 (3,120) 3,259,595
------------ ------------- -------------
5,980,089 (18,396) 5,961,693
Construction work in progress 241,987 (3,329) 238,658
------------ ------------- -------------
Total utility plant 6,222,076 (21,725) 6,200,351
------------ ------------- -------------
CURRENT ASSETS
Cash and temporary cash investments 25,206 1,787 26,993
Restricted deposits 4,646 4,646
Accounts receivable - net 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 1,787 740,475
------------ ------------- -------------
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 (22) 141,559
------------ ------------- -------------
1,146,990 (22) 1,146,968
------------ ------------- -------------
$ 8,107,754 $ (19,960) $ 8,087,794
============ ============= =============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-8 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-5
Financial Statements
Page 2 of 2
CINERGY CORP.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995
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 - 156,567,331 $ 1,566 $ 1,566
Paid-in capital 1,570,873 1,570,873
Retained earnings 900,094 $ 843 900,937
------------ ------------- ------------
Total common stock equity 2,472,533 843 2,473,376
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 (20,803) 2,631,579
------------ ------------- ------------
Total capitalization 5,512,830 (19,960) 5,492,870
------------ ------------- ------------
CURRENT LIABILITIES
Long-term debt and preferred stock
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 $ (19,960) $ 8,087,794
============ ============= ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-8 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-6
Financial Statements
Page 1 of 1
CINERGY CORP.
UNAUDITED 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 $ (936) 290,107
Amortization of phase-in deferrals 2,273 2,273
Post-in-service deferred
operating expenses -- net (5,090) (5,090)
Income taxes 158,951 454 159,405
Taxes other than income taxes 247,216 247,216
------------ ------------ -------------
2,402,392 (482) 2,401,910
------------ ------------ -------------
OPERATING INCOME 459,970 482 460,452
------------ ------------ -------------
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 467,986 482 468,468
------------ ------------ -------------
INTEREST AND OTHER CHARGES
Interest on long-term debt 215,748 (361) 215,387
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 (361) 263,114
------------ ------------ -------------
NET INCOME $ 204,511 $ 843 $ 205,354
============ ============ =============
AVERAGE COMMON SHARES OUTSTANDING 152,331 152,331
EARNINGS PER COMMON SHARE $ 1.33 $ 0.01 $ 1.34
DIVIDENDS DECLARED PER COMMON SHARE $ 1.60 $ 1.60
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-8 of this filing.
</TABLE>
<TABLE>
<CAPTION>
Exhibit FS-7
Financial Statements
Page 1 of 1
CINERGY CORP.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED JUNE 30, 1995
Pro Forma
Actual Adjustments Pro Forma
------------ ----------- ------------
(dollars in thousands)
<S> <C> <C> <C>
Balance, July 31, 1994 $ 943,659 $ 943,659
Net income 204,511 $ 843 205,354
Dividends on common stock (243,797) (243,797)
Other (4,279) (4,279)
------------ ----------- ------------
Balance, June 30, 1995 $ 900,094 $ 843 $ 900,937
============ =========== ============
<FN>
The Pro Forma Adjustments are shown on Exhibit FS-8 of this filing.
</TABLE>
Exhibit FS-8
Financial Statements
Page 1 of 3
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
1) Cash $ 22,661,601
Accumulated depreciation 2,183,897
Utility plant in-service - electric $ 21,516,230
Construction work in progress $ 3,329,268
To record the sale at net book value of equipment in service and under
construction at Woodsdale Generating Station Unit Nos. 1 and 7 of The
Cincinnati Gas & Electric Company (CG&E).
2) Long-term debt - First Mortgage Bonds $ 21,000,000
Cash $ 21,000,000
To record the redemption of $21,000,000 principal amount CG&E's First
Mortgage Bonds, 10.20% Series due December 1, 2020.
3) Loss on reacquired debt $ 1,790,204
Discount on long-term debt $ 205,515
Unamortized debt expense $ 22,289
Cash $ 1,562,400
To record CG&E's loss on redemption of $21,000,000 principal amount of
First Mortgage Bonds, 10.20% Series Due 2020 at 107.44%.
Calculations are as follows:
Princpal amount $ 21,000,000
Discount on long-term debt 205,515
Unamortized debt expense 22,289
-------------
Carrying amount $ 20,772,196
=============
Redemption price % 107.44%
Redemption price $ 22,562,400
Estimated loss on redemption $ 1,790,204
Exhibit FS-8
Financial Statements
Page 2 of 3
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
4) Cash $ 2,142,000
Interest on long-term debt $ 2,142,000
To record CG&E's decrease in annual interest expense from retiring first
mortgage bonds.
Calculation is as follows: Interest
Balance Interest Rate Expense
------------- ------------- -------------
Interest Expense Decrease
-------------------------
First Mortgage Bonds:
10.20% Series Due 2020 $ 21,000,000 10.20% $ 2,142,000
============= =============
5) Discount on long-term debt $ 8,088
Unamortized debt expense $ 852
Amortization of debt discount $ 8,088
Amortization of debt expense $ 852
To record CG&E's decrease in annual amortization of debt discount and
expense from retiring first mortgage bonds.
Calculation is as follows:
Original
at Life of Annual
Issuance Issue Amortization
------------- ------------- -------------
First Mortgage Bonds
10.20% Series Due 2020
----------------------
Debt Discount $ 242,550 30 Years $ 8,088
============= =============
Debt Expense $ 25,554 30 Years $ 852
============= =============
Exhibit FS-8
Financial Statements
Page 3 of 3
CINERGY CORP.
PRO FORMA CONSOLIDATED JOURNAL ENTRIES TO GIVE EFFECT TO
SALE OF EQUIPMENT AND REDEMPTION OF
OUTSTANDING DEBT SECURITIES
Debit Credit
------------- -------------
6) Accumulated depreciation $ 935,956
Depreciation $ 935,956
To record CG&E's reduction in annual depreciation expense for equipment
in-service at time of sale.
Calculation is as follows:
Plant in service at time of sale $ 21,516,230
Assumed Depreciation Rate 4.35%
-------------
$ 935,956
=============
7) Income tax expense $ 453,842
Cash $ 453,842
To record the impact on income tax expense from CG&E transacting the sale
of equipment and redeeming first mortgage bonds with sale cash proceeds.
Calculations are as follows:
Increase
(Decrease)
to Income
-------------
Depreciation $ 935,956
Interest expense 2,142,000
Amortization of discount on long-term debt 8,088
Amortization of expense on long-term debt 852
Loss on reacquired debt (1,790,204)
-------------
Net impact on income $ 1,296,692
=============
Impact on income taxes at
assumed rate of 35% $ 453,842
=============
NOTES:
(a) Excess proceeds, if any, after redeeming securities will be used
for general and corporate purposes.
(b) For purposes of pro-forma financial statements, out-of-pocket
transaction costs and impact on Allowance for Funds have been
ignored.
[ARTICLE] OPUR1
[LEGEND]
THIS SCHEDULE IS EXHIBIT FS-9 AND CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND
CONSOLIDATED STATEMENTS OF INCOME OF THE CINCINNATI GAS & ELECTRIC
COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
[CIK] 0000899652
[NAME] CINERGY CORP.
[SUBSIDIARY]
[NAME] THE CINCINNATI GAS & ELECTRIC COMPANY (CONSOLIDATED)
[NUMBER] 5
[MULTIPLIER] 1,000
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] YEAR YEAR
[FISCAL-YEAR-END] JUN-30-1995 JUN-30-1995
[PERIOD-START] JUL-01-1994 JUL-01-1994
[PERIOD-END] JUN-30-1995 JUN-30-1995
[BOOK-VALUE] PER-BOOK PRO-FORMA
[TOTAL-NET-UTILITY-PLANT] 3,789,288 3,767,563
[OTHER-PROPERTY-AND-INVEST] 0 0
[TOTAL-CURRENT-ASSETS] 518,201 519,988
[TOTAL-DEFERRED-CHARGES] 736,479 736,479
[OTHER-ASSETS] 49,969 49,947
[TOTAL-ASSETS] 5,093,937 5,073,977
[COMMON] 762,136 762,136
[CAPITAL-SURPLUS-PAID-IN] 339,135 339,135
[RETAINED-EARNINGS] 427,623 428,466
[TOTAL-COMMON-STOCKHOLDERS-EQ] 1,528,894 1,529,737
[PREFERRED-MANDATORY] 160,000 160,000
[PREFERRED] 40,000 40,000
[LONG-TERM-DEBT-NET] 1,774,404 1,753,601
[SHORT-TERM-NOTES] 13,500 13,500
[LONG-TERM-NOTES-PAYABLE] 0 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0 0
[LONG-TERM-DEBT-CURRENT-PORT] 0 0
[PREFERRED-STOCK-CURRENT] 90,000 90,000
[CAPITAL-LEASE-OBLIGATIONS] 0 0
[LEASES-CURRENT] 0 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 1,487,139 1,487,139
[TOT-CAPITALIZATION-AND-LIAB] 5,093,937 5,073,977
[GROSS-OPERATING-REVENUE] 1,753,069 1,753,069
[INCOME-TAX-EXPENSE] 107,022 107,476
[OTHER-OPERATING-EXPENSES] 1,350,884 1,349,948
[TOTAL-OPERATING-EXPENSES] 1,457,906 1,457,424
[OPERATING-INCOME-LOSS] 295,163 295,645
[OTHER-INCOME-NET] 9,575 9,575
[INCOME-BEFORE-INTEREST-EXPEN] 304,738 305,220
[TOTAL-INTEREST-EXPENSE] 144,438 144,077
[NET-INCOME] 160,300 161,143
[PREFERRED-STOCK-DIVIDENDS] 21,449 21,449
[EARNINGS-AVAILABLE-FOR-COMM] 138,851 139,694
[COMMON-STOCK-DIVIDENDS] 190,521 190,521
[TOTAL-INTEREST-ON-BONDS] 144,609 144,248
[CASH-FLOW-OPERATIONS] 0 0
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
</TABLE>
[ARTICLE] OPUR1
[LEGEND]
THIS SCHEDULE IS EXHIBIT FS-10 AND CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND
CONSOLIDATED STATEMENTS OF INCOME OF CINERGY CORP. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[CIK] 0000899652
[NAME] CINERGY CORP.
[SUBSIDIARY]
[NUMBER] 0
[NAME] CINERGY CORP. (CONSOLIDATED)
[MULTIPLIER] 1,000
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] YEAR YEAR
[FISCAL-YEAR-END] JUN-30-1995 JUN-30-1995
[PERIOD-START] JUL-01-1994 JUL-01-1994
[PERIOD-END] JUN-30-1995 JUN-30-1995
[BOOK-VALUE] PER-BOOK PRO-FORMA
[TOTAL-NET-UTILITY-PLANT] 6,222,076 6,200,351
[OTHER-PROPERTY-AND-INVEST] 0 0
[TOTAL-CURRENT-ASSETS] 738,688 740,475
[TOTAL-DEFERRED-CHARGES] 1,005,409 1,005,409
[OTHER-ASSETS] 141,581 141,559
[TOTAL-ASSETS] 8,107,754 8,087,794
[COMMON] 1,566 1,566
[CAPITAL-SURPLUS-PAID-IN] 1,570,873 1,570,873
[RETAINED-EARNINGS] 900,094 900,937
[TOTAL-COMMON-STOCKHOLDERS-EQ] 2,472,533 2,473,376
[PREFERRED-MANDATORY] 160,000 160,000
[PREFERRED] 227,915 227,915
[LONG-TERM-DEBT-NET] 2,652,382 2,631,579
[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
[PREFERRED-STOCK-CURRENT] 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 8,087,794
[GROSS-OPERATING-REVENUE] 2,862,362 2,862,362
[INCOME-TAX-EXPENSE] 158,951 159,405
[OTHER-OPERATING-EXPENSES] 2,243,441 2,242,505
[TOTAL-OPERATING-EXPENSES] 2,402,392 2,401,910
[OPERATING-INCOME-LOSS] 459,970 460,452
[OTHER-INCOME-NET] 8,016 8,016
[INCOME-BEFORE-INTEREST-EXPEN] 467,986 468,468
[TOTAL-INTEREST-EXPENSE] 228,845 228,484
[NET-INCOME] 239,141 239,984
[PREFERRED-STOCK-DIVIDENDS] 34,630 34,630
[EARNINGS-AVAILABLE-FOR-COMM] 204,511 205,354
[COMMON-STOCK-DIVIDENDS] 243,797 243,797
[TOTAL-INTEREST-ON-BONDS] 215,748 215,387
[CASH-FLOW-OPERATIONS] 0 0
[EPS-PRIMARY] 1.33 1.34
[EPS-DILUTED] 1.33 1.34
</TABLE>
