File No. 70-9023
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
AMENDMENT NO. 1 TO FORM U-1 DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
Cinergy Investments, Inc.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of companies filing this statement
and addresses of principal executive offices)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Treasurer
Cinergy Corp.
(address above)
(Name and address of agent of service)
Applicants request that the Commission send copies of all notices, orders
and
communications in connection herewith to:
Jerome A. Vennemann William T. Baker
Associate General Counsel Reid & Priest LLP
Cinergy Corp. 40 West 57th
(address above) New York, New York 10019
The following documents are filed herewith:
(a) Exhibits:
F-1 Preliminary opinion of counsel
(b) Financial Statements:
FS-1 Cinergy Consolidated Financial Statements, dated December 31,
1996
FS-2 Cinergy Financial Statements, dated December 31, 1996
FS-3 Investments Consolidated Financial Statements, dated December 31,
1996
FS-4 Cinergy Consolidated Financial Data Schedule (included as part of
electronic submission only)
FS-5 Cinergy Financial Data Schedule (included as part of electronic
submission only)
FS-6 Investments Consolidated Financial Data Schedule (included as
part
of electronic submission only)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned companies
have duly caused this statement to be signed on their behalf by the
undersigned thereunto duly authorized.
Dated: May 20, 1997
CINERGY CORP.
By: /s/ William L. Sheafer
Vice President and Treasurer
CINERGY INVESTMENTS, INC.
By: /s/ William L. Sheafer
Vice President and Treasurer
EXHIBIT F-1
May 19, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cinergy Corp., et al./ File No. 70-9023
Ladies and Gentlemen:
In my capacity as Associate General Counsel of Cinergy Corp.
("Cinergy"), a Delaware corporation and registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"), I
am furnishing this opinion as an exhibit to the Declaration on Form U-1 in
the above docket (such statement, including Amendment No. 1 thereto filed
herewith and any further amendment, if any, thereto, the "Declaration") of
Cinergy and Cinergy Investments, Inc. ("Investments"), a Delaware
corporation and wholly-owned subsidiary of Cinergy.
The Declaration requests authorization for Investments and on behalf
of certain existing or to-be-formed subsidiaries thereof, referred to
therein as "Project Parents," to declare and pay dividends to their
respective parent companies from time to time through December 31, 2002 out
of capital or unearned surplus to the extent permitted under applicable
corporate law, subject to certain additional restrictions applicable to any
such dividends declared and paid by Investments.
In connection with this opinion, I have reviewed the Declaration and
such other documents, records and other materials as I have deemed
necessary or appropriate in order to render this opinion.
I am a member of the Bar of the State of Ohio and do not purport to be
an expert on the laws of any other jurisdiction. I have also examined the
Delaware General Corporation Law ("DGCL") to the extent necessary to
express the opinions set forth herein. The opinions expressed herein are
limited to matters governed by the laws of the State of Ohio and the DGCL.
Based upon and subject to the foregoing, and assuming that (i) the
transactions therein proposed are carried out in accordance with the
Declaration, and (ii) the proposed dividend declarations and payments are
made in accordance with the applicable provisions of the DGCL and otherwise
in accordance with applicable corporate law and applicable contractual
restrictions, if any, I am of the opinion that when the Commission shall
have entered an order permitting the Declaration to become effective:
(a) all state laws applicable to the proposed transactions will have
been complied with; and
(b) the consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by Cinergy or
Investments or any associate company thereof.
I hereby consent to the use of this opinion in connection with the
Declaration.
Very truly yours,
/s/ Jerome A. Vennemann
Associate General Counsel
<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
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<NAME> CINERGY CORP.
<SUBSIDIARY>
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<PERIOD-START> JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6289626 6289626
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194232 194232
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23180 23180
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<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.
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<NAME> CINERGY CORP.
<MULTIPLIER> 1000
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<PERIOD-START> JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
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<CAPITAL-SURPLUS-PAID-IN> 1590735 1590735
<RETAINED-EARNINGS> 992142 990192
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2584454 2582504
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<INCOME-TAX-EXPENSE> (6857) (3576)
<OTHER-OPERATING-EXPENSES> (346055) (338011)
<TOTAL-OPERATING-EXPENSES> (352912) (341587)
<OPERATING-INCOME-LOSS> 352912 341587
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FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
CINERGY CORP.
CONSOLIDATED
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES
Electric ......................................................... $ 2,768,706 $ -- $ 2,768,706
Gas .............................................................. 474,034 -- 474,034
----------- ----------- -----------
3,242,740 -- 3,242,740
OPERATING EXPENSES
Fuel used in electric production ................................. 713,250 -- 713,250
Gas purchased .................................................... 249,116 -- 249,116
Purchased and exchanged power .................................... 158,838 -- 158,838
Other operation .................................................. 598,434 -- 598,434
Maintenance ...................................................... 193,908 -- 193,908
Depreciation ..................................................... 282,763 -- 282,763
Amortization of phase-in deferrals ............................... 13,598 -- 13,598
Post-in-service deferred operating
expenses - net ................................................... (1,509) -- (1,509)
Income taxes ..................................................... 218,269 -- 218,269
Taxes other than income taxes .................................... 257,815 -- 257,815
----------- ----------- -----------
2,684,482 -- 2,684,482
OPERATING INCOME ................................................. 558,258 -- 558,258
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction ..................................................... 1,225 -- 1,225
Post-in-service carrying costs ................................... 1,223 -- 1,223
Phase-in deferred return ......................................... 8,372 -- 8,372
Equity in earnings of unconsolidated subsidiary .................. 25,430 -- 25,430
Income taxes ..................................................... 19,536 1,050 20,586
Other - net ...................................................... (40,464) -- (40,464)
15,322 1,050 16,372
INCOME BEFORE INTEREST AND OTHER CHARGES ......................... 573,580 1,050 574,630
INTEREST AND OTHER CHARGES
Interest on long-term debt ....................................... 190,617 12,375 202,992
Other interest ................................................... 31,169 (9,375) 21,794
Allowance for borrowed funds used
during construction .............................................. (6,183) -- (6,183)
Preferred dividend requirements of
subsidiaries ..................................................... 23,180 -- 23,180
----------- ----------- -----------
238,783 3,000 241,783
NET INCOME ....................................................... $ 334,797 $ (1,950) $ 332,847
COSTS OF REACQUISITION OF PREFERRED
STOCK OF SUBSIDIARY .............................................. (18,391) -- (18,391)
----------- ----------- -----------
NET INCOME APPLICABLE TO COMMON STOCK ............................ $ 316,406 $ (1,950) $ 314,456
AVERAGE COMMON SHARES OUTSTANDING ................................ 157,678 157,678
EARNINGS PER COMMON SHARE
Net Income ....................................................... $ 2.12 $ (0.01) $ 2.11
Costs of reacquisition of preferred stock of
subsidiary ........................................................ (0.12) -- (0.12)
Net Income Applicable to Common Stock ............................ $ 2.00 $ (0.01) $ 1.99
DIVIDENDS DECLARED PER COMMON SHARE .............................. $ 1.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric ......................................................... $8,809,786 $ -- $8,809,786
Gas .............................................................. 713,829 -- 713,829
Common ........................................................... 185,255 -- 185,255
---------- ---------- ----------
9,708,870 -- 9,708,870
Accumulated depreciation ......................................... 3,591,858 -- 3,591,858
---------- ---------- ----------
6,117,012 -- 6,117,012
Construction work in progress .................................... 172,614 -- 172,614
---------- ---------- ----------
Total utility plant .............................................. 6,289,626 -- 6,289,626
CURRENT ASSETS
Cash and temporary cash investments .............................. 19,327 -- 19,327
Restricted deposits .............................................. 1,721 -- 1,721
Accounts receivable less accumulated
provision for doubtful accounts of $10,618 ....................... 199,361 -- 199,361
Materials, supplies, and fuel
- - at average cost
Fuel for use in electric production .............................. 71,730 -- 71,730
Gas stored for current use ....................................... 32,951 -- 32,951
Other materials and supplies ..................................... 80,292 -- 80,292
Property taxes applicable to subsequent year ..................... 123,580 -- 123,580
Prepayments and other ............................................ 37,049 -- 37,049
---------- ---------- ----------
566,011 -- 566,011
OTHER ASSETS
Regulatory Assets
Amounts due from customers - income taxes ........................ 377,194 -- 377,194
Post-in-service carrying costs and
deferred operating expenses ...................................... 186,396 -- 186,396
Coal contract buyout costs ....................................... 138,171 -- 138,171
Deferred demand-side management costs ............................ 134,742 -- 134,742
Phase-in deferred return and depreciation ........................ 95,163 -- 95,163
Deferred merger costs ............................................ 93,999 -- 93,999
Unamortized costs of reacquiring debt ............................ 70,518 -- 70,518
Other ............................................................ 72,483 -- 72,483
Investment in unconsolidated subsidiary .......................... 592,660 -- 592,660
Other ............................................................ 231,551 -- 231,551
---------- ---------- ----------
1,992,877 -- 1,992,877
$8,848,514 $ -- $8,848,514
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996
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 - 157,679,129 Actual ....................... $ 1,577 $ -- $ 1,577
Paid-in capital ............................................... 1,590,735 -- 1,590,735
Retained earnings ............................................. 992,273 (1,950) 990,323
Cumulative foreign currency translation
adjustment .................................................... (131) -- (131)
----------- ----------- -----------
Total common stock equity ..................................... 2,584,454 (1,950) 2,582,504
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES
Not subject to mandatory redemption ........................... 194,232 -- 194,232
LONG-TERM DEBT ................................................ 2,534,978 150,000 2,684,978
----------- ----------- -----------
Total capitalization .......................................... 5,313,664 148,050 5,461,714
CURRENT LIABILITIES
Long-term debt due within one year ............................ 140,000 -- 140,000
Notes payable ................................................. 713,617 (150,000) 563,617
Accounts payable .............................................. 305,420 -- 305,420
Litigation settlement ......................................... -- -- --
Accrued taxes ................................................. 323,059 (1,050) 322,009
Accrued interest .............................................. 55,590 3,000 58,590
Other ......................................................... 114,653 -- 114,653
----------- ----------- -----------
1,652,339 (148,050) 1,504,289
OTHER LIABILITIES
Deferred income taxes ......................................... 1,146,263 -- 1,146,263
Unamortized investment tax credits ............................ 175,935 -- 175,935
Accrued pension and other postretirement
benefit costs ................................................. 263,319 -- 263,319
Other ......................................................... 296,994 -- 296,994
----------- ----------- -----------
1,882,511 -- 1,882,511
$ 8,848,514 $ -- $ 8,848,514
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 .......................................... $ 950,216 $ -- $ 950,216
Net income ......................................................... 334,797 (1,950) 332,847
Dividends on common stock .......................................... (274,358) -- (274,358)
Costs of reacquisition of preferred stock
of subsidiary ...................................................... (18,391) -- (18,391)
Other .............................................................. 9 -- 9
--------- ------- ---------
BALANCE DECEMBER 31, 1996 .......................................... $ 992,273 $(1,950) $ 990,323
</TABLE>
<PAGE>
CINERGY CORP.
Pro Forma Consolidated Journal Entries to Give Effect to the
Issuance of Long-term Debt by an Applicable Project Parent of Cinergy
Investments, Inc. and the Distribution of Such Proceeds to Cinergy Corp.
as Dividends Out of Capital
Entry No. 1
Notes Payable $150,000,000
Long-term debt $150,000,000
To record the issuance of $150,000,000 of long-term debt by an Applicable
Project Parent of Cinergy Investments, Inc. and the distribution of such
proceeds to Cinergy Corp. as dividends out of capital, used as payment of
short-term debt.
Entry No. 2
Interest on long-term debt $ 12,375,000
Accrued interest $ 12,375,000
To record interest on $150,000,000 of long-term debt at 8.25% per annum.
Entry No. 3
Accrued taxes $ 4,331,250
Income taxes $ 4,331,250
To record the reduction in income tax expense due to additional interest on
long-term debt.
($12,375,000 at an assumed tax rate of 35%)
Entry No. 4
Accrued interest $ 9,375,000
Other interest $ 9,375,000
To record the reduction in interest expense due to the $150,000,000 reduction in
notes payable.
($150,000,000 at an assumed interest rate of 6.25%)
Entry No. 5
Income taxes $ 3,281,250
Accrued taxes $ 3,281,250
To record additional income taxes due to reduction in interest expense on notes
payable.
($9,375,000 at an assumed tax rate of 35%)
FINANCIAL STATEMENTS
WASHINGTON, D.C.
FORM U-1
CINERGY CORP.
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands, except per share amounts)
<S> <C> <C> <C>
OTHER INCOME AND EXPENSES - NET
Equity in earnings of consolidated subsidiaries ..................... $ 347,556 $ (8,044) $ 339,512
Income taxes ........................................................ 6,857 (3,281) 3,576
Other - net ......................................................... (1,501) -- (1,501)
--------- --------- ---------
352,912 (11,325) 341,587
INCOME BEFORE INTEREST .............................................. 352,912 (11,325) 341,587
INTEREST ............................................................ 18,115 (9,375) 8,740
NET INCOME .......................................................... $ 334,797 $ (1,950) $ 332,847
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments .......................... $ 3,605 $ -- $ 3,605
Notes receivable from affiliated
companies .................................................... 42 -- 42
Accounts receivable - net .................................... 104 -- 104
Accounts receivable from affiliated
companies .................................................... 10,780 -- 10,780
Prepayments and other ........................................ 1,000 -- 1,000
----------- ----------- ----------
15,531 -- 15,531
OTHER ASSETS
Investment in consolidated subsidiaries ...................... 3,101,501 (158,044) 2,943,457
Other ........................................................ 2,071 -- 2,071
----------- ----------- ----------
3,103,572 (158,044) 2,945,528
$ 3,119,103 $ (158,044) $2,961,059
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
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 - 157,679,129 Actual .................... $ 1,577 $ -- $ 1,577
Paid-in capital ............................................ 1,590,735 -- 1,590,735
Retained earnings .......................................... 992,273 (1,950) 990,323
Cumulative foreign currency translation
adjustment ................................................. (131) -- (131)
----------- ----------- -----------
Total common stock equity .................................. 2,584,454 (1,950) 2,582,504
CURRENT LIABILITIES
Notes payable .............................................. 509,000 (150,000) 359,000
Notes payable to affiliated
companies .................................................. 7 -- 7
Accounts payable ........................................... 2,597 -- 2,597
Accounts payable to affiliated
companies .................................................. 23,196 -- 23,196
Accrued taxes .............................................. (14,439) 3,281 (11,158)
Accrued interest ........................................... 975 (9,375) (8,400)
----------- ----------- -----------
521,336 (156,094) 365,242
OTHER LIABILITIES
Deferred income taxes ...................................... 13,287 -- 13,287
Other ...................................................... 26 -- 26
13,313 -- 13,313
$ 3,119,103 $ (158,044) $ 2,961,059
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 .......................................... $ 950,216 $ -- $ 950,216
Net income ......................................................... 334,797 (1,950) 332,847
Dividends on common stock .......................................... (274,358) -- (274,358)
Costs of reacquisition of preferred stock
of subsidiary ...................................................... (18,391) -- (18,391)
Other .............................................................. 9 -- 9
--------- ------- ---------
BALANCE DECEMBER 31, 1996 .......................................... $ 992,273 $(1,950) $ 990,323
</TABLE>
<PAGE>
CINERGY CORP.
Pro Forma Journal Entries to Give Effect to the
Issuance of Long-term Debt by an Applicable Project Parent and the
Distribution of Such Proceeds to Cinergy Corp. as Dividends Out of Capital
Entry No. 1
Equity in earnings of subsidiaries $ 8,043,750
Investment in subsidiaries $ 8,043,750
To record the net effect of Cinergy Investment Inc.'s pro forma journal entries
involving interest and income tax expense on Cinergy Corporation.
Entry No. 2
Notes Payable $150,000,000
Investment in subsidiaries $150,000,000
To record the dividend out of capital declared by Cinergy Investments, Inc. (on
behalf of an Applicable Project Parent) and the use of such dividend as payment
of short-term debt.
Entry No. 3
Accrued interest $ 9,375,000
Other interest $ 9,375,000
To record the reduction in interest expense due to the $150,000,000 reduction in
notes payable.
($150,000,000 at an assumed interest rate of 6.25%)
Entry No. 4
Income taxes $ 3,281,250
Accrued taxes $ 3,281,250
To record additional income taxes due to reduction in interest expense on notes
payable.
($9,375,000 at an assumed tax rate of 35%)
<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> 13
<NAME> CINERGY INVESTMENTS, INC. (CONSOLIDATED)
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 26699 26699
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 600051 600051
<TOTAL-ASSETS> 626750 626750
<COMMON> 0 0
<CAPITAL-SURPLUS-PAID-IN> 515473 365473
<RETAINED-EARNINGS> 15584 7540
<TOTAL-COMMON-STOCKHOLDERS-EQ> 531057 373013
0 0
0 0
<LONG-TERM-DEBT-NET> 0 150000
<SHORT-TERM-NOTES> 27000 27000
<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> 68693 76737
<TOT-CAPITALIZATION-AND-LIAB> 626750 626750
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (7537) (11868)
<OTHER-OPERATING-EXPENSES> (11436) (11436)
<TOTAL-OPERATING-EXPENSES> (18973) (23304)
<OPERATING-INCOME-LOSS> 18973 23304
<OTHER-INCOME-NET> 0 0
<INCOME-BEFORE-INTEREST-EXPEN> 18973 23304
<TOTAL-INTEREST-EXPENSE> 1308 13683
<NET-INCOME> 17665 9621
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 17665 9621
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
CINERGY INVESTMENTS, INC.
CONSOLIDATED
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
CINERGY INVESTMENTS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OTHER INCOME AND EXPENSES - NET
Equity in earnings of unconsolidated subsidiary ..................... $ 25,430 $ -- $ 25,430
Income taxes ........................................................ 7,537 4,331 11,868
Other - net ......................................................... (13,994) -- (13,994)
-------- -------- --------
18,973 4,331 23,304
INCOME BEFORE INTEREST .............................................. 18,973 4,331 23,304
INTEREST ............................................................ 1,308 12,375 13,683
NET INCOME .......................................................... $ 17,665 $ (8,044) $ 9,621
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY INVESTMENTS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments .............................. $ 682 $ -- $ 682
Accounts receivable less accumulated
provision for doubtful accounts of $171 .......................... 6,579 -- 6,579
Accounts receivable from affiliated
companies ........................................................ 19,005 -- 19,005
Other materials and supplies ..................................... 1 -- 1
Prepayments and other ............................................ 432 -- 432
-------- -------- --------
26,699 -- 26,699
OTHER ASSETS
Investment in unconsolidated subsidiary .......................... 592,660 -- 592,660
Other ............................................................ 7,391 -- 7,391
-------- -------- --------
600,051 -- 600,051
$626,750 $ -- $626,750
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY INVESTMENTS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996
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 - 100;
Outstanding shares - 100 Actual .................................. $ -- $ -- $ --
Paid-in capital .................................................. 515,473 (150,000) 365,473
Retained earnings ................................................ 15,715 (8,044) 7,671
Cumulative foreign currency translation
adjustment ....................................................... (131) -- (131)
--------- --------- ---------
Total common stock equity ........................................ 531,057 (158,044) 373,013
LONG-TERM DEBT ................................................... -- 150,000 150,000
--------- --------- ---------
Total capitalization ............................................. 531,057 (8,044) 523,013
CURRENT LIABILITIES
Notes payable .................................................... 27,000 -- 27,000
Accounts payable ................................................. 10,459 -- 10,459
Accrued taxes .................................................... (982) (4,331) (5,313)
Accrued interest ................................................. -- 12,375 12,375
Other ............................................................ 65,355 -- 65,355
--------- --------- ---------
101,832 8,044 109,876
OTHER LIABILITIES
Deferred income taxes ............................................ (6,678) -- (6,678)
Other ............................................................ 539 -- 539
--------- --------- ---------
(6,139) -- (6,139)
$ 626,750 $ -- $ 626,750
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY INVESTMENTS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 $(1,950) $ - $(1,950)
Net income 17,665 (8,044) 9,621
---------------------------------------------
------- -------- -------
BALANCE DECEMBER 31, 1996 $15,715 $(8,044) $ 7,671
</TABLE>
<PAGE>
CINERGY INVESTMENTS, INC.
Pro Forma Consolidated Journal Entries to Give Effect to the
Issuance of Long-term Debt by an Applicable Project Parent and the
Distribution of Such Proceeds to Cinergy Corp. as Dividends Out of Capital
Entry No. 1
Paid-in capital $150,000,000
Long-term debt $150,000,000
To record the issuance of $150,000,000 of long-term debt by an Applicable
Project Parent and the distribution of such proceeds to Cinergy Corp. as a
dividend out of capital.
Entry No. 2
Interest expense $ 12,375,000
Accrued interest $ 12,375,000
To record interest on $150,000,000 of long-term debt at 8.25% per annum.
Entry No. 3
Accrued taxes $ 4,331,250
Income taxes $ 4,331,250
To record reduction in income tax expense due to additional interest on
long-term debt. ($12,375,000 at an assumed tax rate of 35%)
