File No. 70-9015
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
AMENDMENT NO. 2 TO FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
Cinergy Investments, Inc.
Cinergy Services, Inc.
The Cincinnati Gas & Electric Company
The Union Light, Heat and Power Company
The West Harrison Gas and Electric Company
Lawrenceburg Gas Company
Miami Power Corporation
Tri-State Improvement Company
KO Transmission Company
139 East Fourth Street
Cincinnati, Ohio 45202
PSI Energy, Inc.
1000 East Main Street
Plainfield, Indiana 46168
(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 application-declaration as previously amended is hereby amended
and restated in its entirety to read as follows:
Item 1. Description of Proposed Transactions
Cinergy Corp. ("Cinergy"), a registered holding company under the
Public Utility Holding Company Act of 1935, as amended (the "Act"); Cinergy
Investments, Inc., Cinergy's subsidiary nonutility company ("Investments");
PSI Energy, Inc., an electric utility subsidiary of Cinergy ("PSI"), The
Cincinnati Gas & Electric Company, an electric and gas utility subsidiary
of Cinergy ("CG&E"); CG&E's utility subsidiaries: Lawrenceburg Gas Company
("Lawrenceburg"), The West Harrison Gas and Electric Company ("West
Harrison") and Miami Power Corporation ("Miami"); and CG&E's nonutility
subsidiaries: Tri-State Improvement Company ("Tri-State") and KO
Transmission Company ("KO"), propose to engage in the transactions
hereinafter described.
PSI, an Indiana corporation, is engaged in the production,
transmission, distribution and sale of electricity in north central,
central and southern Indiana and serves an estimated population of two
million people located in 69 of Indiana's 92 counties, including the cities
of Bloomington, Columbus, Kokomo, Lafayette, New Albany and Terre Haute.
CG&E and its subsidiaries ULH&P, Lawrenceburg and West Harrison provide
electric and/or gas service in the southwestern portion of Ohio and
adjacent areas in Kentucky and Indiana. The area served with electricity,
gas, or both covers approximately 3,000 square miles and includes the
cities of Cincinnati and Middletown in Ohio, Covington and Newport in
Kentucky, and Lawrenceburg in Indiana. Miami owns a 138 kV transmission
line running from Miami Fort Power Station to a point near Madison,
Indiana. KO, a Kentucky corporation, transports gas between Kentucky and
Ohio by means of an interstate pipeline located almost entirely in Kentucky
in which it has a one-third ownership interest. Tri-State, an Ohio
corporation, acquires and holds property in Ohio, Kentucky and Indiana for
substations, electric and gas rights of way, office space and other uses in
connection with CG&E's and its subsidiaries' utility operations. Cinergy
Services, Inc. ("Cinergy Services") is a service company that provides
various services exclusively to associate companies. Investments functions
as a holding company with respect to certain of Cinergy's nonutility
subsidiaries.
A. August 1995 Order
By order dated August 25, 1995 (Release No. 35-26362) ("August 1995
Order"), Cinergy, CG&E, PSI, ULH&P, West Harrison, Lawrenceburg, Miami,
Cinergy Services, Tri-State and KO were authorized to engage in the
following transactions through May 31, 1997: (1) PSI, ULH&P, Lawrenceburg,
West Harrison and Miami were authorized to incur short-term borrowings from
banks and, in PSI's case, through the issuance and sale of commercial
paper; (2) Cinergy was authorized to issue guarantees and provide letters
of credit in connection with short-term bank borrowings of its utility and
nonutility subsidiaries; and (3) all of the foregoing companies, together
with CG&E, Cinergy Services, Tri-State and KO, were authorized to implement
a money pool ("Money Pool") to coordinate and provide for their short-term
cash and working capital requirements.
The proceeds of such short-term borrowings were to be utilized by PSI,
ULH&P, Lawrenceburg, West Harrison and Miami for general corporate purposes
including (1) interim financing of capital requirements, (2) working
capital needs, (3) repayment, redemption or refinancing of debt or
preferred stock, and (4) loans through the Money Pool. The August 1995
Order limited the aggregate principal amount of short-term borrowings at
any one time outstanding (whether through the Money Pool or from banks or
the sale of commercial paper) to the following amounts: PSI, $400 million;
ULH&P, $35 million; West Harrison, $200,000; Lawrenceburg, $3 million; and
Miami, $100,000. Finally, the August 1995 Order limited the maximum amount
of guarantees and letters of credit issued or obtained by Cinergy to a $375
million aggregate limitation imposed by the Commission in another
proceeding (Release No. 35-26215, January 11, 1995). In March 1996
(Release No. 35-26488, March 12, 1996) ("March 1996 Order"), the Commission
authorized Cinergy to incur short-term bank borrowings, issue and sell
commercial paper and obtain letters of credit in an aggregate principal
amount at any one time outstanding not to exceed $1 billion through
December 31, 1999.
B. Summary of Requested Authorizations
Applicants herein seek authority to engage in the following proposed
transactions, in each case through December 31, 2002:
1. In connection with the continued use of the Money Pool, (a) PSI,
ULH&P, Lawrenceburg, West Harrison and Miami propose to make loans to and
incur borrowings from one another thereunder, and (b) Cinergy, Cinergy
Services, CG&E, Tri-State and KO propose to make loans to PSI, ULH&P,
Lawrenceburg, West Harrison and Miami thereunder;
2. PSI, ULH&P, Lawrenceburg, West Harrison and Miami propose to
incur short-term bank borrowings and PSI proposes to issue and sell
commercial paper; and
3. Cinergy and Investments propose to guarantee the debt or other
obligations of certain existing Cinergy system companies and companies
whose securities may be acquired by Cinergy or any subsidiary thereof from
time to time through December 31, 2002 pursuant to and in accordance with
rule 58 (Release No. 35-26667, February 14, 1997).
Proceeds of any short-term borrowings by PSI, ULH&P, Lawrenceburg,
West Harrison and Miami (whether from banks, the Money Pool or, in PSI's
case, through the sale of commercial paper) would be used by such companies
for general corporate purposes, including (1) interim financing of capital
requirements; (2) working capital needs; (3) repayment, redemption,
refinancing of debt or preferred stock; (4) cash requirements to meet
unexpected contingencies and payment and timing differences; (5) loans
through the Money Pool; and (6) other transactions relating to these
Applicants' utility businesses.
Under the authority requested herein, the maximum principal amount of
short-term borrowings outstanding at any one time by PSI, ULH&P,
Lawrenceburg, West Harrison and Miami (whether from banks, the Money Pool
or, in PSI's case, through the sale of commercial paper) (each, a
"Borrowing Limitation") would not exceed the following amounts: PSI, $400
million; ULH&P, $50 million; West Harrison, $200,000; Lawrenceburg, $3
million; and Miami, $100,000. PSI's and ULH&P's estimated capital
requirements for 1997 are approximately $447 million and $33 million,
respectively.
Guarantees issued (I) by Cinergy would be subject to the $1 billion
aggregate limitation specified in the March 1996 Order (subject to any
increases in that authorization that Cinergy may obtain pursuant to one or
more further orders of the Commission), and (ii) by Investments would not
exceed $250 million at any one time outstanding.
C. Money Pool
Subject to the respective Borrowing Limitations, from time to time
through December 31, 2002, PSI, ULH&P, Lawrenceburg, West Harrison and
Miami propose to make loans to each other, and Cinergy, Cinergy Services,
CG&E, Tri-State and KO propose to make loans to PSI, ULH&P, Lawrenceburg,
West Harrison and Miami, all pursuant to and in accordance with the Money
Pool./1/ Applicants propose no changes to the Money Pool as authorized in
the August 1995 Order and embodied in the related Money Pool Agreement./2/
Under the Money Pool, funds are made available from the following
sources from time to time for short-term loans to Money Pool Participants:
(1) surplus treasury funds of Money Pool Participants ("Internal Funds")
and (2) proceeds from bank borrowings by Money Pool Participants or the
sale of commercial paper by Cinergy, CG&E or PSI ("External Funds"). Funds
are made available from such sources in such order as Cinergy Services, as
administrator of the Money Pool, determines would result in a lower cost of
borrowing, consistent with the individual borrowing needs and financial
standing of the companies providing funds to the Money Pool. Companies
that borrow from the Money Pool borrow pro rata from each lending company,
in the proportion that the total amount loaned by each such lending company
bears to the total amount then loaned through the Money Pool. On any day
when more than one fund source with different rates of interest is used to
fund loans through the Money Pool, each borrowing company borrows pro rata
from each such fund source in the same proportion that the amount of funds
provided by that fund source bears to the total amount of short-term funds
available to the Money Pool. No Money Pool Participant is required to
borrow through the Money Pool if it determines that it could borrow at a
lower cost directly from banks or through the sale of commercial paper.
Cinergy may not borrow from the Money Pool.
Fees paid to banks to maintain credit lines by Money Pool Participants
lending External Funds to the Money Pool are paid by the Money Pool
Participant maintaining the line quarterly. A portion of those costs are
allocated to the companies borrowing such External Funds through the Money
Pool in proportion to their outstanding borrowings of such External Funds.
When only Internal Funds comprise the funds available in the Money
Pool, the interest rate applicable to loans thereof is the CD yield
equivalent of the 30-day Federal Reserve "AA" Industrial Commercial Paper
Composite Rate, which rate parallels the lenders' effective cost of capital
with respect to such internal funds. When only External Funds comprise the
funds available in the Money Pool, the interest rate applicable to loans
thereof is equal to the lending company's cost for such External Funds (or
a composite rate equal to the weighted average of the of the costs incurred
by the respective Money Pool Participants for such External Funds, if more
than one Money Pool Participant had made available External Funds on such
day).
In circumstances where both Internal Funds and External Funds are
concurrently borrowed through the Money Pool, the rate applicable to all
loans comprised of such "blended" funds is a composite rate equal to the
weighted average of (a) the cost of all such Internal Funds and (b) the
cost of all such External Funds. Where both Internal Funds and External
Funds are available for loans through the Money Pool, loans may be made
exclusively from Internal Funds or External Funds, rather than from a
"blending" of such funds, to the extent it is determined that such loans
would result in a lower cost of borrowing.
Money Pool loans are in the form of open-account advances documented
and evidenced on the books of the Money Pool Participants, although each
lending party is entitled upon demand to receive from any Money Pool
Participant to whom it advances funds one or more promissory notes
evidencing any or all of its advances. Each party receiving a Money Pool
loan is required to repay the principal amount of such loan, together with
all interest accrued thereon, upon demand and in any event not later than
one year from the date of the advance. All Money Pool loans are prepayable
by the borrower in whole or in part at any time without premium or penalty.
Money Pool advances accrue interest monthly.
Funds not required to make Money Pool loans (other than funds required
to satisfy the Money Pool's liquidity requirements) may be invested in one
or more short-term investments, including (1) interest-bearing accounts
with banks, (2) obligations issued or guaranteed by the U.S. Government or
its agencies and instrumentalities, including obligations under repurchase
agreements, (3) obligations issued or guaranteed by any state or political
subdivision thereof rated not less than "A" by a nationally recognized
rating agency, (4) commercial paper rated not less than "A-1" or "P-1" or
their equivalent by a nationally recognized rating agency, (5) money market
funds, (6) bank certificates of deposit, (7) Eurodollar time deposits and
certificates of deposit, and (8) such other investments as are permitted by
section 9 of the Act and rule 40 thereunder.
Interest income and investment income earned on loans and investments
of surplus funds are allocated among the Money Pool Participants in
accordance with the proportion each participant's contribution bears to the
total amount of funds in the Money Pool and the cost of funds provided to
the Money Pool by such participant.
Operation of the Money Pool, including record-keeping and coordination
of loans, is administered by Cinergy Services on an "at cost" basis under
the authority of the appropriate officers of the Money Pool Participants.
Cinergy, CG&E and PSI expressly acknowledge in the Money Pool
Agreement that none of such companies will seek to overturn, reverse, set
aside, change or enjoin, whether through appeal or the initiation or
maintenance of any action in any forum, a decision or order of the Public
Utilities Commission of Ohio ("PUCO") or the Indiana Utility Regulatory
Commission ("IURC") which pertains to recovery, disallowance, allowance,
deferral or ratemaking treatment of any expense, charge, cost or allocation
incurred or accrued by CG&E or PSI in or as a result of a contract,
agreement, arrangement or transaction with any affiliate, associate,
holding, mutual service or subsidiary company on the basis that such
expense, charge, cost or allocation has itself been filed with or approved
by the Securities and Exchange Commission or was incurred pursuant to a
contract, arrangement or allocation method which was filed with or approved
by the Securities and Exchange Commission.
D. Short-Term Bank Borrowings and Commercial Paper
Subject to the respective Borrowing Limitations, from time to time
through December 31, 2002, (a) PSI, ULH&P, Lawrenceburg, West Harrison and
Miami propose to borrow short-term funds from banks or other financial
institutions pursuant to formal or informal credit facilities, and (b) PSI
proposes to issue and sell commercial paper to commercial paper dealers.
1. Bank Borrowings
Bank borrowings would be evidenced by promissory notes, each of which
would be issued on or before December 31, 2002 and would mature no later
than one year from the date of issuance (except in the case of borrowings
by ULH&P, which would mature no later than two years from the date of
issuance)/3/, would bear interest at a rate no higher than the prime rate
for commercial bank loans prevailing on the date of such borrowing, and may
require fees to the lender not to exceed 50 basis points per annum on the
total commitment.
2. Commercial Paper
Subject to the Borrowing Limitation applicable to it, from time to
time through December 31, 2002, PSI also proposes to issue and sell
commercial paper to one or more dealers (or directly to financial
institutions if the resulting cost of money is equal to or less than that
available from dealer-placed commercial paper).
PSI proposes to issue and sell the commercial paper at market rates
with varying maturities not to exceed 270 days. The commercial paper will
be in the form of book-entry unsecured promissory notes with varying
denominations of not less than $25,000 each. No commission or fee will be
payable in connection with the issue and sale of the commercial paper.
However, the purchasing dealer will re-offer the commercial paper at a rate
less than the rate to PSI. The discount rate to dealers will not exceed
the maximum discount rate per annum prevailing at the date of issuance for
commercial paper of comparable quality and the same maturity. The
purchasing dealer will re-offer the commercial paper in such a manner as
not to constitute a public offering within the meaning of the Securities
Act of 1933.
E. Cinergy/Investments Guarantees
Subject in the case of Cinergy to the $1 billion aggregate limitation
set forth in the March 1996 Order (including any increase in such
limitation pursuant to one or more further orders of the Commission), and
in the case of Investments to an aggregate limitation at any one time
outstanding not to exceed $250 million, Cinergy and Investments seek
authorization from time to time through December 31, 2002 to guarantee the
debt and other obligations of (1) certain existing Cinergy system companies
and (2) any "energy-related companies" whose securities Cinergy or any
subsidiary thereof may acquire from time to time pursuant to and in
accordance with rule 58. (The companies referenced in clauses (1) and (2)
are collectively referred to as "Primary Obligors.")
The existing Cinergy system companies as to which Cinergy and
Investments seek authorization to issue guarantees are (as to Cinergy only)
Cinergy Services and (as to both Cinergy and Investments) certain
nonutility subsidiaries of Cinergy and Investments, namely, KO, Tri-State,
Cinergy Resources, Inc. (formerly CG&E Resource Marketing, Inc.), Cinergy
Capital & Trading, Inc. (formerly Wholesale Power Services, Inc.), Cinergy
Technology, Inc. (formerly PSI Environmental Corp.) and Enertech
Associates, Inc. (formerly Power International, Inc.).
All of the foregoing nonutility companies were in existence at the
date of the Commission's 1994 order authorizing the Cinergy merger and
related transactions (Release No. 35-26146, October 21, 1994), and
accordingly are subject to the Commission's pending reservation of
jurisdiction with respect to the ultimate retainability of such companies
and the other then-existing nonutility companies and nonutility business
intersts of Cinergy and its subsidiaries. That reservation of jurisdiction
expires on October 21, 1997 and Cinergy will be filing with the Commission
on or before that date an application seeking a release of such
jurisdiction. In that regard, Cinergy believes that some or all of such
companies may be retainable pursuant to rule 58. In any event, Cinergy and
Investments acknowledge that any grant by the Commission herein of the
requested guarantee authority in respect of such nonutility companies in
no way affects resolution of the question of the ultimate retainability of
such companies.
Debt financing of any Primary Obligor which is so guaranteed will not
exceed 30 years and will bear interest either at a floating rate not in
excess of 200 basis points over the prime rate, applicable LIBOR or other
appropriate index in effect from time to time or at a fixed rate not in
excess of 300 basis points above the yield at the time of issuance of U.S.
Treasury obligations of a comparable maturity. Any commitment or other
fees on the debt will not exceed 100 basis points on the total amount of
debt financing.
Obligations (other than debt) of Primary Obligors that Cinergy and
Investments propose to receive authorization to guarantee or otherwise act
as indemnitor or surety would involve a Primary Obligor's obligation to
perform under contracts with sellers or customers. Guarantees issued by
Cinergy or Investments in these circumstances may take the form of
procuring bid bonds and the like; guaranteeing a Primary Obligor's
performance; or other similar direct or indirect guarantees of a Primary
Obligor's contractual obligations. These arrangements may be necessary in
order for a Primary Obligor to satisfy a seller or a customer that it has
adequate support for its contractual obligations.
Cinergy will not seek recovery through higher rates to customers of
Cinergy's utility subsidiaries in order to compensate it or Investments for
any potential losses they may sustain resulting from such guarantees.
F. Reporting Obligations
Within 45 days after the end of each calendar quarter, Cinergy
Services, on behalf of the Applicants, will file a certificate with the
Commission pursuant to rule 24 under the Act setting forth the following
information with respect to the preceding calendar quarter: (I) each
Applicant's maximum principal amount of external short-term borrowings
outstanding at any one time outstanding (i.e., bank borrowings and, in
PSI's case, commercial paper); (ii) with respect to the operation of the
Money Pool, (a) the average annual interest rate applicable to borrowings
through the Money Pool, (b) the maximum principal amount of Money Pool
borrowings by the respective Applicants outstanding at any one time, and
the maximum principal amount of funds loaned through the Money Pool by the
respective Applicants outstanding at any one time; and (iii) a summary of
any guarantees issued by Cinergy or Investments.
G. Rule 54 Statement
Under Rule 54, in determining whether to approve the issue or sale of
a security by a registered holding company for purposes other than the
acquisition of an EWG or a FUCO 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 if the conditions
in Rule 53(a), (b) and 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 of the
proposed transactions, will exist.
Rule 53(a)(1): At December 31, 1996, Cinergy had invested, directly
or indirectly, an aggregate of approximately $487 million in EWGs and
FUCOs. The average of the consolidated retained earnings of Cinergy
reported on Form 10-K or Form 10-Q, as applicable, for the four consecutive
quarters ended December 31, 1996 was $990 million. Accordingly, based on
Cinergy's "consolidated retained earnings" at December 31, 1996, and taking
into account EWG /FUCO investments as of that date, the current Rule 53
aggregate investment limitation is approximately $8 million (i.e., 50% of
"consolidated retained earnings" $495 million minus "aggregate
investment" at December 31, 1996 $487 million).
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): No more than 2% of the employees of Cinergy's
operating utility subsidiaries will, at any one time, directly or
indirectly, render services to EWGs and FUCOs.
Rule 53(a)(4): Cinergy will simultaneously submit a copy of this
statement and of any Rule 24 certificate hereunder, as well as a copy of
Cinergy's Form U5S and Exhibits H and I thereto, to each public utility
commission having jurisdiction over the retail rates of any Cinergy utility
subsidiary.
Rule 53(b): The provisions of Rule 53(a) are not made inapplicable to
the authorization 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): Cinergy's average consolidated retained earnings for
the four quarters ended December 31, 1996 are $990 million, versus $926
million for the four quarters ended December 31, 1995, a difference of
approximately $64 million (representing an increase of 6.9%).
Rule 53(b)(3): For the twelve months ended December 31, 1996, Cinergy
did not report operating losses attributable to its direct and indirect
investments in EWGs and FUCOs aggregating in excess of 5% of consolidated
retained earnings.
Item 2. Fees, Commissions and Expenses
The fees, commissions and expenses ("Fees") to be incurred, directly
or indirectly, by Applicants or any associate companies thereof in
connection with the proposed transactions are estimated as follows:
Fees of Cinergy Services $15,000
Fees of Reid & Priest $5,000
TOTAL $20,000
Item 3. Applicable Statutory Provisions
Applicants consider that sections 6(a), 7, 9(a), 10 and 12(b) of
the Act and rules 40, 43, 45, 52 and 54 thereunder are or may be applicable
to the proposed transactions.
Item 4. Regulatory Approval
The IURC does not have jurisdiction over short-term borrowings by
PSI, Lawrenceburg, West Harrison and other Indiana utilities with
maturities of one year or less.
The Kentucky Public Service Commission does not have securities
issuance jurisdiction over short-term borrowings by ULH&P and other
Kentucky utilities with maturities of two years or less.
Under the Ohio Revised Code, a public utility which is an electric
light company, such as CG&E, when authorized by an order of the PUCO, may
issue notes or other evidences of indebtedness payable at periods of not
more than 12 months. The foregoing provision does not apply to the issue,
renewal or assumption of liability of notes and other evidences of
indebtedness maturing not more than 12 months after the date of such issue,
renewal or assumption of liability and aggregating (together with all other
then outstanding notes and other evidences of indebtedness of a maturity of
12 months or less on which such electric light company is primarily or
secondarily liable) not more than 5% of the par value of the other stocks,
bonds, notes and other evidences of indebtedness of such electric light
company then outstanding (the "Ohio Statutory Exemption").
By orders dated May 4, 1995 (Case Nos. 95-275-GE-AIS and 95-358-GE-AIS)
and June 20, 1996 (Case No. 96-488-GE-AIS), the PUCO authorized CG&E
to become a participant in the Money Pool and to issue and renew unsecured
notes, including commercial paper, and other evidences of short-term
indebtedness, maturing at periods of not more than 12 months, from time to
time through (initially) June 30, 1996 and (by the later order) through
June 30, 1997, provided that CG&E's aggregate principal amount of short-term
indebtedness, including any short-term indebtedness incurred pursuant
to the Ohio Statutory Exemption, did not exceed $400 million at any time
outstanding. The orders also authorized CG&E to apply the proceeds of such
short-term borrowings to specified purposes including Money Pool loans.
By order dated May 15, 1997 in Case No. 97-362-GE-AIS (Exhibit D-2
hereto), the PUCO authorized CG&E to issue and renew, from time to time
through June 30, 1998, unsecured notes, including commercial paper, and
other evidences of short-term indebtedness, maturing at periods of not more
than 12 months, provided that CG&E's aggregate principal amount of short-term
indebtedness, including any short-term indebtedness incurred pursuant
to the Ohio Statutory Exemption, does not exceed $400 million at any time
outstanding. The order also authorized CG&E to apply the proceeds of such
short-term borrowings to specified purposes including Money Pool loans.
No other state or federal regulatory agency has jurisdiction over the
proposed transactions.
Item 5. Procedure
Applicants request that the Commission issue and publish by not
later than March 28, 1997 the requisite notice under Rule 23 with respect
to the filing of this Application-Declaration. Applicants further request
that such notice specify a date not later than April 21, 1997 as the date
after which the Commission may issue an order granting and permitting to
become effective this Application-Declaration, and that the Commission
issue such order as soon as practicable thereafter.
Applicants waive a recommended decision by a hearing officer or other
responsible officer of the Commission; consent that the Staff of the
Division of Investment Management may assist in the preparation of the
Commission's order; and request 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 Form of note evidencing borrowings from banks
(incorporated by reference from File No. 70-8587).
A-2 Form of commercial paper note of PSI (incorporated by
reference from File No. 70-8587).
A-3 Form of note evidencing borrowings under Money Pool
(incorporated by reference from File No. 70-8587).
B Form of Money Pool Agreement (incorporated by reference
from File No. 70-8587).
C Not applicable
D-1 Application of CG&E to PUCO (Case No. 97-362-GE-AIS)
(filed herewith)
D-2 Finding and Order of PUCO (Case No. 97-362-GE-AIS)
(filed herewith)
E Not applicable
F-1 Preliminary opinion of Jerome A. Vennemann, Esq. (filed
herewith)
F-2 Preliminary opinion of Ronald J. Brothers, Esq. (filed
herewith)
F-3 Preliminary opinion of David T. Musselman, Esq. (filed
herewith)
G Form of Federal Register notice (previously filed)
(b) Financial Statements:
FS-1 Cinergy Consolidated Financial Statements, dated
December 31, 1996 (filed herewith)
FS-2 Cinergy Financial Statements, dated December 31, 1996
(filed herewith)
FS-3 Investments Consolidated Financial Statements, dated
December 31, 1996 (filed herewith)
FS-4 Cinergy Services Financial Statements, dated December
31, 1996 (filed herewith)
FS-5 CG&E Consolidated Financial Statements, dated December
31, 1996 (filed herewith)
FS-6 ULH&P Financial Statements, dated December 31, 1996
(filed herewith)
FS-7 West Harrison Financial Statements, dated December 31,
1996 (filed herewith)
FS-8 Lawrenceburg Financial Statements, dated December 31,
1996 (filed herewith)
FS-9 Miami Financial Statements, dated December 31, 1996
(filed herewith)
FS-10 Tri-State Financial Statements, dated December 31, 1996
(filed herewith)
FS-11 KO Financial Statements, dated December 31, 1996 (filed
herewith)
FS-12 PSI Consolidated Financial Statements, dated December
31, 1996 (filed herewith)
FS-13 Cinergy Consolidated Financial Data Schedule (included
as part of electronic submission only)
FS-14 Cinergy Financial Data Schedule (included as part of
electronic submission only)
FS-15 Investments Consolidated Financial Data Schedule
(included as part of electronic submission only)
FS-16 Cinergy Services Financial Data Schedule (included as
part of electronic submission only)
FS-17 CG&E Consolidated Financial Data Schedule (included as
part of electronic submission only)
FS-18 ULH&P Financial Data Schedule (included as part of
electronic submission only)
FS-19 West Harrison Financial Data Schedule (included as part
of electronic submission only)
FS-20 Lawrenceburg Financial Data Schedule (included as part
of electronic submission only)
FS-21 Miami Financial Data Schedule (included as part of
electronic submission only)
FS-22 Tri-State Financial Data Schedule (included as part of
electronic submission only)
FS-23 KO Financial Data Schedule (included as part of
electronic submission only)
FS-24 PSI Consolidated Financial Data Schedule (included as
part of 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
companies have duly caused this statement to be signed on their behalf by
the undersigned thereunto duly authorized.
Dated: May 30, 1997
Cinergy Corp.
By: /s/ William L. Sheafer
Vice President and Treasurer
Cinergy Investments, Inc.
By: /s/ William L. Sheafer
Vice President and Treasurer
Cinergy Services, Inc.
By: /s/ William L. Sheafer
Vice President and Treasurer
The Cincinnati Gas & Electric Company
By: /s/ William L. Sheafer
Vice President and Treasurer
The Union Light, Heat and Power Company
By: /s/ William L. Sheafer
Vice President and Treasurer
The West Harrison Gas and Electric Company
By: /s/ William L. Sheafer
Vice President and Treasurer
Lawrenceburg Gas Company
By: /s/ William L. Sheafer
Vice President and Treasurer
Miami Power Corporation
By: /s/ William L. Sheafer
Vice President and Treasurer
Tri-State Improvement Company
By: /s/ William L. Sheafer
Vice President and Treasurer
KO Transmission Company
By: /s/ William L. Sheafer
Vice President and Treasurer
PSI Energy, Inc.
By: /s/ William L. Sheafer
Vice President and Treasurer
ENDNOTES
/1/ Any borrowings by Cinergy Services, CG&E, Tri-State and KO from each
other under the Money Pool or from the other Money Pool Participants
thereunder will be exempt (together with the corresponding loans) pursuant
to rule 52.
/2/ Cinergy, Cinergy Services, CG&E, Tri-State, KO, PSI, ULH&P,
Lawrenceburg, West Harrison and Miami are sometimes herein collectively
referred to as the "Money Pool Participants." The August 1995 Order also
approved a proposal to establish a similar money pool arrangement for
nonutility companies in the Cinergy system ("Nonutility Money Pool").
However, Cinergy has not implemented the Nonutility Money Pool and has no
present intention to do so. Cinergy does not seek to continue any
authority granted in the August 1995 Order that related to the Nonutility
Money Pool, including with respect to combined short-term investments of
surplus funds.
/3/ See Item 4 with respect to the varying scope of short-term securities
issuance jurisdiction exercised by the Kentucky Public Service Commission,
the IURC and the PUCO.
Exhibit D-1
File No. 70-9015
BEFORE
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of )
The Cincinnati Gas & Electric Company )
for authority to issue not in excess ) Case No. 97-362-GE-AIS
of $400,000,000 at any one time of )
short-term unsecured notes and other )
evidences of indebtedness )
APPLICATION AND STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
To the Honorable
The Public Utilities Commission of Ohio:
The Cincinnati Gas & Electric Company (CG&E), a public utility as
defined in Section 4905.02, Ohio Revised Code, represents the following:
1. At December 31, 1996, CG&E could have borrowed without approval
of this Commission a total of $115,128,650 of notes or other evidences of
indebtedness payable at periods of not more than 12 months, pursuant to the
provisions of Section 4905.401(A), Ohio Revised Code.
Par Values of the outstanding securities of CG&E:
Long-term Bonds and Notes $1,519,291,159
Preferred Stock $100 Par Value 21,145,600
Common Stock $8.50 Par Value 762,136,231
Total Par Value $2,302,572,990
5% of $2,302,572,990 $ 115,128,650
As of December 31, 1996, CG&E had $30,900,000 of outstanding notes
payable with a maturity less than 12 months from date of issuance,
$130,000,000 of long-term debt maturing in 1997 and $160,000,000 of
long-term debt scheduled for early redemption in 1997.
2. Presently, CG&E has, in accordance with Section 4905.401 Revised
Code, the necessary consent and authority of the Commission (Case No.
96-488-GE-AIS) to issue and/or renew its promissory notes and other
evidences of indebtedness, including commercial paper, in excess of the
statutory exemption in an aggregate principal amount such that its total
outstanding short-term indebtedness does not exceed $400,000,000 at any one
time through June 30, 1997. CG&E by this application requests an order
granting the necessary consent and authority of this Commission,
supplementing and replacing such existing authority, to continue to issue
and/or renew unsecured short-term notes or other evidences of indebtedness,
including commercial paper, in an aggregate principal amount not exceeding
$400,000,000 at any one time between the date of an order entered herein
and June 30, 1998.
3. CG&E was granted authority (Case No. 95-275-GE-AIS) to enter into
and file at the Securities and Exchange Commission (the "SEC") the Cinergy
Corp. Utility Money Pool (the "Money Pool"). The purpose of the Money Pool
is to assist Cinergy's utility subsidiaries in least-cost financing of
their interim capital requirements. By order dated August 25, 1995
(Release No. 35-26362), the SEC granted authority, under the Public Utility
Holding Company Act of 1935, to Cinergy and its utility subsidiaries to
implement the Money Pool through May 31, 1997. The Money Pool contract, as
approved by this Commission in Case No. 95-275-GE-AIS, remains in effect.
Cinergy has filed an Application (see Exhibit A attached hereto) to extend
the SEC authority for implementation of the Money Pool through December 31,
2002.
4. CG&E proposes to issue the notes in excess of its statutory
exemption for the following purposes: discharge or lawful refunding of its
obligations including debt and/or preferred stock; necessary acquisitions
of property, construction, completion, extension, renewal and improvement
of its facilities; improvement of its service; reimbursement of moneys
actually expended for the foregoing purposes from its income or from any
other moneys in its treasury not secured or obtained from the issue of its
stocks, bonds, notes or other evidences of indebtedness; for loans to other
participants in the Money Pool; and, for working capital and other general
corporate purposes.
5. The terms upon which the unsecured notes and other evidences of
indebtedness in excess of its statutory exemption are to be issued are as
follows:
CG&E intends to borrow under the herein requested authority from banks
or other financial institutions on unsecured promissory notes, through the
issuance of commercial paper and other evidences of short-term
indebtedness, and through participation in the Money Pool referred to
above, to afford more latitude in obtaining short-term financing as
required. No maturity will be more than 12 months from the date of
issuance.
The commercial paper will be issued at the going rate of discount on
the date of issuance. Unsecured bank notes and other evidences of
indebtedness will bear interest at the then prevailing prime rate or the
best available rate.
6. CG&E has attached hereto and submits the following exhibits as a
part of this application:
Exhibit B - Pages 1 and 2. The Cincinnati Gas & Electric Company -
Balance Sheet as of December 31, 1996.
Exhibit C - The Cincinnati Gas & Electric Company - Income Statement
for the 12 Months Ended December 31, 1996.
WHEREFORE, The Cincinnati Gas & Electric Company requests that this
Commission issue an order finding that:
(1) This application was filed under the provisions of Section 4905.401,
Revised Code.
(2) Pursuant to Section 4905.401, Revised Code, Applicant was permitted
to have outstanding notes and other evidences of short-term indebtedness
issuable without authority of this Commission (the "Statutory Exemption")
in the amount of $115,128,650 as of December 31, 1996.
(3) Applicant has existing authority (Case No. 96-488-GE-AIS) to issue
not in excess of $400,000,000 at any one time of unsecured notes and other
evidences of indebtedness (including commercial paper) through June 30,
1997. Applicant, as of December 31, 1996, had $30,900,000 of short-term
debt outstanding with a maturity less than 12 months from date of issuance,
$130,000,000 of long-term debt maturing in 1997, and $160,000,000 of
long-term debt scheduled for early redemption in 1997.
(4) Applicant is requesting consent and authority to issue, reissue
and/or renew through June 30, 1998, unsecured notes and other evidences of
indebtedness (including commercial paper) payable at periods of less than
12 months, in an aggregate amount of up to $400,000,000 at any one time.
Such aggregate amount of short-term indebtedness is to be in addition to
any other financing which may be undertaken during the period with the
approval of this Commission.
(5) The proceeds derived by Applicant from the issuance and renewal of
the short-term indebtedness in excess of its Statutory Exemption will be
applied by the Applicant for the purposes set forth in Section 4905.40,
Revised Code. Such purposes and application of proceeds both being
reasonably required by Applicant to meet its present and prospective
obligations to provide utility service.
(6) The commercial paper will be issued at the going rate of discount on
the date of issuance and the unsecured notes and other evidences of
indebtedness will bear interest at the then prevailing prime rate or the
best available rate.
(7) The amount of the issue of such unsecured notes, and other evidences
of indebtedness (including commercial paper), and the probable cost thereof
are just and reasonable, and the effect of the issuance and cost thereof
on present and prospective revenue requirements of the Applicant is
dependent upon future interest rates and the extent of utilization of the
authority herein requested, neither of which can be accurately predicted at
this time.
and ordering that:
(1) Applicant, The Cincinnati Gas & Electric Company, be, and hereby is,
authorized, without further order of this Commission, to issue and/or renew
its promissory notes and other evidences of indebtedness maturing at
periods of not more than 12 months (including commercial paper) in excess
of the statutory exemption in an aggregate amount such that Applicant's
total outstanding short-term indebtedness does not exceed $400,000,000
through June 30, 1998. Said amount may be outstanding during such time
irrespective of any other financing which the Applicant may undertake with
approval of this Commission;
(2) The commercial paper will be issued at the going rate of discount on
the date of issuance and the unsecured notes and other evidences of
indebtedness will bear interest at the then prevailing prime rate or the
best available rate;
(3) The proceeds derived by Applicant under the authority herein granted
shall be applied pursuant to Finding (5) above;
(4) Nothing herein contained shall be construed to imply any guaranty or
obligation as to said unsecured notes and other evidences of indebtedness
(including commercial paper) or the interest thereon on the part of the
State of Ohio;
(5) The authority herein granted may be exercised from and after the
date of an Order.
Respectfully submitted this 28th day of March, 1997.
THE CINCINNATI GAS & ELECTRIC COMPANY
Bradley C. Arnett, Esq.
James B. Gainer, Esq.
P.O. Box 960
Cincinnati, Ohio 45201 By /s/ J. Wayne Leonard
Attorneys for Applicant J. Wayne Leonard
Group Vice-President and
Chief Financial Officer
/s/ William L. Sheafer
William L. Sheafer, Treasurer
STATE OF OHIO :
: SS
COUNTY OF HAMILTON :
The undersigned J. Wayne Leonard and William L. Sheafer personally
appearing before me, a Notary Public, and each being duly sworn says that
the facts and allegations contained in the foregoing application and
statement are true to the best of his knowledge and belief.
/s/ J. Wayne Leonard
J. Wayne Leonard
/s/ William L. Sheafer
William L. Sheafer
Sworn to and subscribed before me this 28th day of March, 1997.
/s/ Anita M. Schafer
Notary Public
BEFORE
THE PUBLIC UTILITIES COMMISSION OF OHIO
In the Matter of the Application of )
The Cincinnati Gas and Electric )
Company for Authority to Issue not ) Case No. 97-362-GE-AIS
in Excess of $400,000,000 at Any )
One Time of Short-Term Unsecured )
Notes and Other Evidences of )
Indebtedness )
FINDING AND ORDER
The Commission finds:
(1) Applicant, The Cincinnati Gas & Electric Company, is an Ohio
Corporation and a public utility as defined in Section 4905.02, Ohio
Revised Code, subject to the jurisdiction of this Commission.
(2) This Application is filed under provision of Sections 4905.40,
4905.401(A), 4905.41, Ohio Revised Code.
(3) Applicant has existing authority (Case No. 96-488-GE-AIS), through June
30, 1997, to issue and/or renew its unsecured notes and other evidences of
short-term indebtedness, including commercial paper, maturing for periods
of not more than twelve months, provided that the aggregate principal
amount of short-term indebtedness will not exceed $400 million at any one
time.
(4) To supplement and replace such existing authority, Applicant is now
requesting Commission authority, through June 30, 1998, to continue to
issue and/or renew its unsecured notes and other evidences of short-term
indebtedness, including commercial paper maturing for periods of not more
than twelve months, in an aggregate principal amount not to exceed $400
million at any one time.
(5) Pursuant to Section 4905.401, Revised Code, Applicant was permitted to
have outstanding notes and other evidences of short-term indebtedness
issuable without prior authority of this Commission (the "Statutory
Exemption") in the amount of $115 million. Applicant had about $50 million
of short-term debt outstanding, as of March 31, 1997.
(6) The proceeds from the issuance of the short-term debt will be used to
refund Applicant's obligations, including high-cost debt or preferred
stock, temporarily finance its construction program, to acquire property
and for loans to other participants in the Cinergy Utility Money Pool
(authorization from this Commission to issue and acquire promissory notes
in connection with the Utility Money Pool was rendered in Case No.
95-275-GE-AIS) and for working capital and other general corporate
purposes.
(7) Based on information contained in the Application and exhibits thereto,
the purposes for which the proceeds from the issuance of the short-term
debt will be applied appear to (sic) reasonably required for the
Applicant's lawful capital purposes, and the Commission is satisfied that
consent and authority should be granted accordingly.
It is, therefore,
ORDERED, That The Cincinnati Gas & Electric Company is hereby
authorized, through June 30, 1998, to issue and/or renew unsecured notes,
including commercial paper, and other evidences of short-term indebtedness,
maturing at periods of not more than twelve months, provided that
Applicant's aggregate principal amount of short-term indebtedness,
including the Statutory Exemption, does not exceed $400 million at any one
time. It is, further,
ORDERED, That the proceeds derived by the Applicant under the authority
granted herein shall be applied for the purposes specified in this Order,
or otherwise pursuant to the provisions of Section 4905.401, Revised Code.
It is, further,
ORDERED, That the authorization granted by this Order shall not be
construed as limiting the Commission's determination of the appropriateness
of Applicant's future long-term security offerings. It is, further,
ORDERED, That nothing in this Order shall be construed to imply any
guaranty or obligation by as to the unsecured notes or other evidences of
indebtedness, or the associated interest, on the part of the State of Ohio.
It is, further,
ORDERED, That nothing in this Order shall be construed to imply any
guaranty or obligation by the Commission to ensure completion of any
specific construction project of the Applicant. It is, further,
ORDERED, That nothing in this Order shall be deemed to be binding upon
this Commission in any future proceeding or investigation involving the
justness or reasonableness of any rate, charge, rule or regulation. It is,
further,
ORDERED, That a copy of this Order be served upon all parties of
record.
THE PUBLIC UTILITIES COMMISSION OF OHIO
/s/ Crag A. Glazer, Chairman
/s/Jolynn Barry Butler /s/Ronda Hartman Fergus
/s/David W. Johnson /s/Judith A. Jones
SEJ:dj
EXHIBIT F-1
May 15, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cinergy Corp., et al./ File No. 70-9015
Ladies and Gentlemen:
I am 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") and am
furnishing this opinion as an exhibit to the Application-Declaration on
Form U-1 in the above docket, as previously amended and as proposed to be
further amended by Amendment No. 2 thereto filed herewith (such amended
statement, including any further amendments, if any, thereto, the
"Application"), filed by Cinergy and certain of its direct and indirect
subsidiary companies namely, Cinergy Investments, Inc. ("Investments"),
Cinergy Services, Inc. ("Cinergy Services"), The Cincinnati Gas & Electric
Company ("CG&E"), The Union Light, Heat and Power Company ("ULH&P"), The
West Harrison Gas and Electric Company ("West Harrison"), Lawrenceburg Gas
Company ("Lawrenceburg"), Miami Power Corporation ("Miami"), Tri-State
Improvement Company ("Tri-State"), KO Transmission Company ("KO") and PSI
Energy, Inc. ("PSI" and, collectively with the aforementioned companies,
the "Applicants"). Capitalized terms used herein but not defined herein
have the respective meanings assigned thereto in the Application.
In the Application, Applicants request authority to engage in the
following transactions (collectively, "Proposed Transactions"), in each
case through December 31, 2002: (1) in connection with the continued use
of the Money Pool, (a) PSI, ULH&P, Lawrenceburg, West Harrison and Miami
propose to make loans to and incur borrowings from one another
thereunder, and (b) Cinergy, Cinergy Services, CG&E, Tri-State and KO
propose to make loans to PSI, ULH&P, Lawrenceburg, West Harrison and Miami
thereunder; (2) PSI, ULH&P, Lawrenceburg, West Harrison and Miami propose
to incur short-term bank borrowings and PSI proposes to issue and sell
commercial paper; and (3) Cinergy and Investments propose to guarantee
(each, a "Guarantee") the debt or other obligations of (a) certain existing
Cinergy system companies and (b) companies whose securities may be acquired
by Cinergy or any subsidiary thereof from time to time pursuant to rule 58
under the Act.
In connection with this opinion, I have reviewed the Application 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 below are
limited solely to matters governed by the laws of the State of Ohio and the
DGCL.
Based upon and subject to the foregoing, and assuming that the
Proposed Transactions are carried out (i) in accordance with the
Application and the Commission's order to be issued granting and permitting
the Application to become effective and (ii) in accordance with all
other requisite approvals and authorizations, regulatory, corporate or
otherwise, I am of the opinion that:
(a) Cinergy and Investments are validly incorporated and duly
existing under the laws of the State of Delaware.
(b) All state laws applicable to the Proposed Transactions will have
been complied with.
(c) With reference to transactions under the Money Pool, Cinergy,
Cinergy Services, CG&E and Tri-State will legally acquire any promissory
notes or other evidences of indebtedness to be issued to either of them by
any borrowing Applicant in exchange for loans to such Applicant thereunder.
(d) Any Guarantees to be issued by Cinergy or Investments will be
valid and binding contingent obligations of Cinergy or Investments, as the
case may be, in each case enforceable in accordance with the terms thereof,
except to the extent such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by applicable
principles of equity (regardless of whether such enforceability is sought
in a proceeding at law or in equity).
(e) the consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by Cinergy,
Investments, Cinergy Services, CG&E, Tri-State or any associate company
thereof
I hereby consent to the use of this opinion in connection with the
Application.
Very truly yours,
/s/ Jerome A. Vennemann
Associate General Counsel
EXHIBIT F-2
May 15, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cinergy Corp., et al./ File No. 70-9015
Ladies and Gentlemen:
I am Senior 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") and am furnishing this opinion
as an exhibit to the Application-Declaration on Form U-1 in the above
docket, as previously amended and as proposed to be further amended by
Amendment No. 2 thereto filed herewith (such amended statement, including
any further amendments, if any, thereto, the "Application"), filed by
Cinergy and certain of its direct and indirect subsidiary companies
namely, Cinergy Investments, Inc. ("Investments"), Cinergy Services, Inc.
("Cinergy Services"), The Cincinnati Gas & Electric Company ("CG&E"), The
Union Light, Heat and Power Company ("ULH&P"), The West Harrison Gas and
Electric Company ("West Harrison"), Lawrenceburg Gas Company
("Lawrenceburg"), Miami Power Corporation ("Miami"), Tri-State Improvement
Company ("Tri-State"), KO Transmission Company ("KO") and PSI Energy, Inc.
("PSI" and, collectively with the aforementioned companies, the
"Applicants"). Capitalized terms used herein but not defined herein have
the respective meanings assigned thereto in the Application.
In the Application, Applicants request authority to engage in the
following transactions (collectively, "Proposed Transactions"), in each
case through December 31, 2002:
(1) in connection with the continued use of the Money Pool, (a) PSI, ULH&P,
Lawrenceburg, West Harrison and Miami propose to make loans to and incur
borrowings from one another thereunder, and (b) Cinergy, Cinergy Services,
CG&E, Tri-State and KO propose to make loans to PSI, ULH&P, Lawrenceburg,
West Harrison and Miami thereunder; (2) PSI, ULH&P, Lawrenceburg, West
Harrison and Miami propose to incur short-term bank borrowings and PSI
proposes to issue and sell commercial paper; and (3) Cinergy and
Investments propose to guarantee the debt or other obligations of (a)
certain existing Cinergy system companies and (b) companies whose
securities may be acquired by Cinergy or any subsidiary thereof from
time to time pursuant to rule 58 under the Act.
In connection with this opinion, I have reviewed the Application 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 Commonwealth of Kentucky and the
opinions expressed below are limited solely to matters governed by the laws
of such Commonwealth.
Based upon and subject to the foregoing, and assuming that the
Proposed Transactions are carried out (i) in accordance with the
Application and the Commission's order to be issued granting and permitting
the Application to become effective and (ii) in accordance with all other
requisite approvals and authorizations, regulatory, corporate or otherwise,
I am of the opinion that:
a. ULH&P and KO are validly incorporated and duly existing under the
laws of the Commonwealth of Kentucky.
b. All state laws applicable to the Proposed Transactions will have
been complied with.
c. With reference to transactions under the Money Pool, ULH&P and KO
will legally acquire any promissory notes or other evidences of
indebtedness to be issued to either of them by any borrowing Applicant
in exchange for loans to such Applicant thereunder.
d. All notes or other evidences of indebtedness to be issued by ULH&P
pursuant to the Proposed Transactions, whether in connection with
short-term borrowings under the Money Pool or from banks, will be valid and
binding obligations of ULH&P enforceable in accordance with the terms
thereof, except to the extent such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or
by applicable principles of equity (regardless of whether such
enforceability is sought in a proceeding at law or in equity).
e. the consummation of the proposed transactions will not violate the
legal rights of the holders of any securities issued by ULH&P or KO or any
associate company thereof.
I hereby consent to the use of this opinion in connection with the
Application.
Very truly yours,
/s/ David T. Musselman
Senior Counsel
EXHIBIT F-3
May 15, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cinergy Corp., et al./ File No. 70-9015
Ladies and Gentlemen:
I am 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") and am
furnishing this opinion as an exhibit to the Application-Declaration on
Form U-1 in the above docket, as previously amended and as proposed to be
further amended by Amendment No. 2 thereto filed herewith (such amended
statement, including any further amendments, if any, thereto, the
"Application") filed by Cinergy and certain of its direct and indirect
subsidiary companies namely, Cinergy Investments, Inc. ("Investments"),
Cinergy Services, Inc. ("Cinergy Services"), The Cincinnati Gas & Electric
Company ("CG&E"), The Union Light, Heat and Power Company ("ULH&P"), The
West Harrison Gas and Electric Company ("West Harrison"), Lawrenceburg Gas
Company ("Lawrenceburg"), Miami Power Corporation ("Miami"), Tri-State
Improvement Company ("Tri-State"), KO Transmission Company ("KO") and PSI
Energy, Inc. ("PSI" and, collectively with the aforementioned companies,
the "Applicants"). Capitalized terms used herein but not defined herein
have the respective meanings assigned thereto in the Application.
In the Application, Applicants request authority to engage in the
following transactions (collectively, "Proposed Transactions"), in each
case through December 31, 2002: (1) in connection with the continued use
of the Money Pool, (a) PSI, ULH&P, Lawrenceburg, West Harrison and Miami
propose to make loans to and incur borrowings from one another thereunder,
and (b) Cinergy, Cinergy Services, CG&E, Tri-State and KO propose to make
loans to PSI, ULH&P, Lawrenceburg, West Harrison and Miami thereunder; (2)
PSI, ULH&P, Lawrenceburg, West Harrison and Miami propose to incur
short-term bank borrowings and PSI proposes to issue and sell commercial
paper; and (3) Cinergy and Investments propose to guarantee (each, a
"Guarantee") the debt or other obligations of (a) certain existing Cinergy
system companies and (b) companies whose securities may be acquired by
Cinergy or any subsidiary thereof from time to time pursuant to and in
accordance with rule 58 under the Act.
In connection with this opinion, I have reviewed the Application 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 Indiana and the opinions
expressed below are limited solely to matters governed by the laws of such
State.
Based upon and subject to the foregoing, and assuming that the
Proposed Transactions are carried out (i) in accordance with the
Application and the Commission's order to be issued granting and permitting
the Application to become effective and (ii) in accordance with all other
requisite approvals and authorizations, regulatory, corporate or otherwise,
I am of the opinion that:
a. PSI, Lawrenceburg, West Harrison and Miami are validly
incorporated and duly existing under the laws of the State of Indiana.
b. All state laws applicable to the Proposed Transactions will have
been complied with.
c. With reference to transactions under the Money Pool, PSI,
Lawrenceburg, West Harrison and Miami will legally acquire any
promissory notes or other evidences of indebtedness to be issued to
either of them by any borrowing Applicant in exchange for loans to such
Applicant thereunder.
d. All notes or other evidences of indebtedness to be issued by
PSI, Lawrenceburg, West Harrison and Miami pursuant to the Proposed
Transactions, whether in connection with short-term borrowings under
the Money Pool or from banks or, in PSI's case, the issuance of
commercial paper, will be valid and binding obligations of PSI,
Lawrenceburg, West Harrison or Miami, as the case may be, in each case
enforceable in accordance with the terms thereof, except to the extent
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by applicable principles of
equity (regardless of whether such enforceability is sought in a
proceeding at law or in equity).
e. the consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by PSI,
Lawrenceburg, West Harrison or Miami or any associate company thereof.
I hereby consent to the use of this opinion in connection with the
Application.
Very truly yours,
/s/ Ronald J. Brothers
Associate General Counsel
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 5,481 25,017
Other - net ...................................................... (40,464) -- (40,464)
----------- ----------- -----------
15,322 5,481 20,803
INCOME BEFORE INTEREST AND OTHER CHARGES ......................... 573,580 5,481 579,061
INTEREST AND OTHER CHARGES
Interest on long-term debt ....................................... 190,617 -- 190,617
Other interest ................................................... 31,169 15,660 46,829
Allowance for borrowed funds used
during construction .............................................. (6,183) -- (6,183)
Preferred dividend requirements of
subsidiaries ..................................................... 23,180 -- 23,180
----------- ----------- -----------
238,783 15,660 254,443
NET INCOME ....................................................... $ 334,797 $ (10,179) $ 324,618
COSTS OF REACQUISITION OF PREFERRED
STOCK OF SUBSIDIARY .............................................. (18,391) -- (18,391)
----------- ----------- -----------
NET INCOME APPLICABLE TO COMMON STOCK ............................ $ 316,406 $ (10,179) $ 306,227
AVERAGE COMMON SHARES OUTSTANDING ................................ 157,678 157,678
EARNINGS PER COMMON SHARE
Net Income ....................................................... $ 2.12 $ (0.06) $ 2.06
Costs of reacquisition of preferred stock
of subsidiary .................................................... (0.12) -- (0.12)
----------- ----------- -----------
Net Income Applicable to Common Stock ............................ $ 2.00 $ (0.06) $ 1.94
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 .............................. 19,327 261,006 280,333
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
---------- ---------- ----------
566,011 261,006 827,017
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 $ 261,006 $9,109,520
</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 (10,179) 982,094
Cumulative foreign currency translation
adjustment .................................................... (131) -- (131)
----------- ----------- -----------
Total common stock equity ..................................... 2,584,454 (10,179) 2,574,275
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES
Not subject to mandatory redemption ........................... 194,232 -- 194,232
LONG-TERM DEBT ................................................ 2,534,978 -- 2,534,978
----------- ----------- -----------
Total capitalization .......................................... 5,313,664 (10,179) 5,303,485
CURRENT LIABILITIES
Long-term debt due within one year ............................ 140,000 -- 140,000
Notes payable ................................................. 713,617 261,006 974,623
Accounts payable .............................................. 305,420 -- 305,420
Litigation settlement ......................................... -- -- --
Accrued taxes ................................................. 323,059 (5,481) 317,578
Accrued interest .............................................. 55,590 15,660 71,250
Other ......................................................... 114,653 -- 114,653
1,652,339 271,185 1,923,524
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 $ 261,006 $ 9,109,520
</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 (10,179) 324,618
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 $(10,179) $ 982,094
</TABLE>
<PAGE>
CINERGY CORP.
Pro Forma Consolidated Journal Entries to Give Effect to the Borrowing
of Up to $453,300,000 from Banks
Entry No. 1
Cash and temporary cash investments $261,005,933
Notes payable $261,005,933
To record the issuance of notes payable of The Union Light, Heat, and Power
Company, The West Harrison Gas and Electric Company, Lawrenceburg Gas Company,
Miami Power Corporation, and PSI Energy, Inc. net of $147,129,000 of notes
payable outstanding as of December 31, 1996.
Entry No. 2
Other interest $ 15,660,356
Accrued interest $ 15,660,356
To record interest on $261,005,933 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 5,481,125
Income taxes $ 5,481,125
To record the reduction in income taxes due to increased interest expense on
notes payable.
($15,660,356 at an assumed tax rate of 35%).
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 -- 7,537
Other - net ........................................................... (13,994) -- (13,994)
-------- ------- --------
18,973 -- 18,973
INCOME BEFORE INTEREST ................................................ 18,973 -- 18,973
INTEREST .............................................................. 1,308 -- 1,308
NET INCOME ............................................................ $ 17,665 $ -- $ 17,665
<FN>
Note:
Cinergy Investments, Inc. has no pro forma consolidated journal entries relating to this proposed transaction.
</FN>
</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
<FN>
Note:
Cinergy Investments, Inc. has no pro forma journal entries relating to this proposed transaction.
</FN>
</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 -- 515,473
Retained earnings ................................................ 15,715 -- 15,715
Cumulative foreign currency translation
adjustment ....................................................... (131) -- (131)
--------- --------- ---------
Total common stock equity ........................................ 531,057 -- 531,057
CURRENT LIABILITIES
Notes payable .................................................... 27,000 -- 27,000
Accounts payable ................................................. 10,459 -- 10,459
Accrued taxes .................................................... (982) -- (982)
Other ............................................................ 65,355 -- 65,355
--------- --------- ---------
101,832 -- 101,832
OTHER LIABILITIES
Deferred income taxes ............................................ (6,678) -- (6,678)
Other ............................................................ 539 -- 539
--------- --------- ---------
(6,139) -- (6,139)
$ 626,750 $ -- $ 626,750
<FN>
Note:
Cinergy Investments, Inc. has no pro forma journal entries relating to this proposed transaction.
</FN>
</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 -- 17,665
-------- ------ --------
BALANCE DECEMBER 31, 1996 .................................. $ 15,715 $ -- $ 15,715
<FN>
Note:
Cinergy Investments, Inc. has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
MIAMI POWER CORPORATION
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
MIAMI POWER CORPORATION
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>
ELECTRIC OPERATING REVENUES
Affiliated companies .................................................... $39 $-- $39
OPERATING EXPENSES
Other operation ......................................................... 16 -- 16
Maintenance ............................................................. 1 -- 1
Depreciation ............................................................ 1 -- 1
Income taxes ............................................................ 6 -- 6
Taxes other than income taxes ........................................... 6 -- 6
--- ---- ---
30 -- 30
OPERATING INCOME ........................................................ 9 -- 9
OTHER INCOME AND EXPENSES - NET ......................................... -- 2 2
--- ---- ---
INCOME BEFORE INTEREST .................................................. 9 2 11
INTEREST ................................................................ -- 6 6
--- ---- ---
NET INCOME .............................................................. $ 9 $ (4) $ 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MIAMI POWER CORPORATION
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT - ORIGINAL COST
In service ................................................................ $564 $-- $564
Accumulated depreciation .................................................. 555 -- 555
---- ---- ----
Total electric utility plant .............................................. 9 -- 9
CURRENT ASSETS
Cash ...................................................................... 67 100 167
Accounts receivable from affiliated companies ............................. 1 -- 1
---- ---- ----
68 100 168
$ 77 $100 $177
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MIAMI POWER CORPORATION
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 - without par value; $1 stated value Authorized shares - 10,000
Outstanding shares - 1,000 Actual ......................................... $ 1 $-- $ 1
Retained earnings (deficit) ............................................... (6) (4) (10)
----- ----- -----
Total capitalization ...................................................... (5) (4) (9)
CURRENT LIABILITIES
Notes payable ............................................................. -- 100 100
Accounts payable to affiliated companies .................................. 75 -- 75
Accrued taxes ............................................................. 2 (2) (0)
Accrued interest .......................................................... -- 6 6
----- ----- -----
77 104 181
OTHER LIABILITIES
Deferred income taxes ..................................................... (32) -- (32)
Accrued pension and other postretirement
benefit costs ............................................................. 4 -- 4
Other ..................................................................... 33 -- 33
----- ----- -----
5 -- 5
$ 77 $ 100 $ 177
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MIAMI POWER CORPORATION
PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS (DEFICIT)
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 ...................................... $ 15 $-- $ 15
Net income ..................................................... 9 (4) 5
Dividends on common stock ...................................... (30) -- (30)
---- --- ----
BALANCE DECEMBER 31, 1996 ...................................... $ (6) $(4) (10)
</TABLE>
<PAGE>
MIAMI POWER CORPORATION
Pro Forma Journal Entries to Give Effect to the Borrowing
of Up to $100,000 from Banks
Entry No. 1
Cash $100,000
Notes payable $100,000
To record the issuance of $100,000 of notes payable.
Entry No. 2
Interest $ 6,000
Accrued interest $ 6,000
To record interest on $100,000 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 2,100
Income taxes $ 2,100
To record the reduction in income taxes due to increased interest expense on
notes payable.
($6,000 at an assumed tax rate of 35%).
FINANCIAL STATEMENTS
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
PSI ENERGY, INC.
CONSOLIDATED
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
PSI ENERGY, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES
Non-affiliated companies ................................... $ 1,309,878 $ -- $ 1,309,878
Affiliated companies ....................................... 22,084 -- 22,084
----------- ----------- -----------
$ 1,331,962 $ -- $ 1,331,962
OPERATING EXPENSES
Fuel ....................................................... 364,053 -- 364,053
Purchased and exchanged power
Non-affiliated companies ................................... 112,505 -- 112,505
Affiliated companies ....................................... 43,343 -- 43,343
Other operation ............................................ 268,478 -- 268,478
Maintenance ................................................ 97,703 -- 97,703
Depreciation ............................................... 121,812 -- 121,812
Post-in-service deferred operating
expenses - net ............................................. (4,799) -- (4,799)
Income taxes ............................................... 73,194 -- 73,194
Taxes other than income taxes .............................. 49,911 -- 49,911
----------- ----------- -----------
1,126,200 -- 1,126,200
OPERATING INCOME ........................................... 205,762 -- 205,762
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction ............................................... -- -- --
Post-in-service carrying costs ............................. 1,223 -- 1,223
Income taxes ............................................... (3,997) 5,033 1,036
Other - net ................................................ 1,878 -- 1,878
----------- ----------- -----------
(896) 5,033 4,137
INCOME BEFORE INTEREST ..................................... 204,866 5,033 209,899
INTEREST
Interest on long-term debt ................................. 67,001 -- 67,001
Other interest ............................................. 14,511 14,381 28,892
Allowance for borrowed funds used
during construction ........................................ (2,324) -- (2,324)
----------- ----------- -----------
79,188 14,381 93,569
NET INCOME ................................................. 125,678 (9,348) 116,330
PREFERRED DIVIDEND REQUIREMENT ............................. 12,537 -- 12,537
----------- ----------- -----------
NET INCOME APPLICABLE TO COMMON STOCK ...................... $ 113,141 $ (9,348) $ 103,793
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSI ENERGY, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT - ORIGINAL COST
In service ....................................................... $4,178,181 $ -- $4,178,181
Accumulated depreciation ......................................... 1,723,279 -- 1,723,279
---------- ---------- ----------
2,454,902 -- 2,454,902
Construction work in progress .................................... 76,630 -- 76,630
---------- ---------- ----------
Total utility plant .............................................. 2,531,532 -- 2,531,532
CURRENT ASSETS
Cash and temporary cash investments .............................. 2,911 239,688 242,599
Restricted deposits .............................................. 550 -- 550
Notes receivable from affiliated companies ....................... 3 -- 3
Accounts receivable less accumulated
provision for doubtful accounts of $1,269 ........................ 74,289 -- 74,289
Accounts receivable from affiliated companies .................... 4,016 -- 4,016
Materials, supplies and fuel
- - at average cost
Fuel ............................................................. 41,865 -- 41,865
Other materials and supplies ..................................... 28,268 -- 28,268
Prepayments and other ............................................ 3,184 -- 3,184
---------- ---------- ----------
155,086 239,688 394,774
OTHER ASSETS
Regulatory assets
Amounts due from customers - income taxes ........................ 33,068 -- 33,068
Post-in-service carrying costs and
deferred operating expenses ...................................... 44,904 -- 44,904
Coal contract buyout costs ....................................... 138,171 -- 138,171
Deferred demand-side management costs ............................ 101,208 -- 101,208
Deferred merger costs ............................................ 76,290 -- 76,290
Unamortized costs of reacquiring debt ............................ 32,079 -- 32,079
Other ............................................................ 52,938 -- 52,938
Other ............................................................ 129,667 -- 129,667
608,325 -- 608,325
$3,294,943 $ 239,688 $3,534,631
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSI ENERGY, 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 - without par value; $.01 stated value; Authorized shares -
60,000,000
Outstanding shares -53,913,701 Actual .......................... $ 539 $ -- $ 539
Paid-in capital ................................................ 402,947 -- 402,947
Retained earnings .............................................. 626,089 (9,348) 616,741
---------- ----------- ----------
Total common stock equity ...................................... 1,029,575 (9,348) 1,020,227
CUMULATIVE PREFERRED STOCK
Not subject to mandatory redemption ............................ 173,086 -- 173,086
LONG-TERM DEBT ................................................. 969,870 -- 969,870
---------- ----------- ----------
Total capitalization ........................................... 2,172,531 (9,348) 2,163,183
CURRENT LIABILITIES
Long-term debt due within one year ............................. 10,000 -- 10,000
Notes payable .................................................. 147,129 239,688 386,817
Notes payable to affiliated companies .......................... 13,186 -- 13,186
Accounts payable ............................................... 114,330 -- 114,330
Accounts payable to affiliated companies ....................... 12,850 -- 12,850
Accrued taxes .................................................. 73,206 (5,033) 68,173
Accrued interest ............................................... 24,045 14,381 38,426
Other .......................................................... 17,107 -- 17,107
---------- ----------- ----------
411,853 249,036 660,889
OTHER LIABILITIES
Deferred income taxes .......................................... 372,997 -- 372,997
Unamortized investment tax credits ............................. 52,750 -- 52,750
Accrued pension and other postretirement
benefit costs .................................................. 98,037 -- 98,037
Other .......................................................... 186,775 -- 186,775
---------- ----------- ----------
710,559 -- 710,559
$3,294,943 $ 239,688 $3,534,631
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSI ENERGY, INC.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 ................................. $ 625,275 $ -- $ 625,275
Net income ................................................ 125,678 (9,348) 116,330
Dividends on preferred stock .............................. (12,629) -- (12,629)
Dividends on common stock ................................. (112,076) -- (112,076)
Other ..................................................... (159) -- (159)
--------- ------- ---------
BALANCE DECEMBER 31, 1996 ................................. $ 626,089 $(9,348) $ 616,741
</TABLE>
<PAGE>
PSI ENERGY, INC.
Pro Forma Consolidated Journal Entries to Give Effect to the Borrowing
of Up to $400 Million from Banks
Entry No. 1
Cash $239,688,000
Notes payable $239,688,000
To record the issuance of notes payable net of $160,312,000 of notes receivable
from affiliated companies and all notes payable as of December 31, 1996.
Entry No. 2
Other interest $ 14,381,280
Accrued interest $ 14,381,280
To record interest on $239,688,933 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 5,033,448
Income taxes $ 5,033,448
To record the reduction in income taxes due to increased interest expense on
notes payable.
($14,381,280 at an assumed tax rate of 35%).
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
CINERGY SERVICES, INC.
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 5
<PAGE>
<TABLE>
<CAPTION>
CINERGY SERVICES, INC.
PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Actual Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES ......................................... $ 615,348 $ -- $ 615,348
OPERATING EXPENSES
Other operation ............................................ 603,158 -- 603,158
Depreciation ............................................... 157 -- 157
Taxes other than income taxes .............................. 11,158 -- 11,158
--------- --------- ---------
614,473 -- 614,473
OPERATING INCOME ........................................... 875 -- 875
OTHER INCOME AND EXPENSES - NET
Other - net ................................................ (93) -- (93)
--------- --------- ---------
(93) -- (93)
INCOME BEFORE INTEREST ..................................... 782 -- 782
INTEREST
Other interest ............................................. 569 -- 569
--------- --------- ---------
569 -- 569
NET INCOME ................................................. $ 213 $ -- $ 213
<FN>
Note:
Cinergy Services has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY SERVICES, INC.
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 .............................. $ 7,009 $ -- $ 7,009
Accounts receivable .............................................. 477 -- 477
Accounts receivable from affiliated
companies ........................................................ 14,357 -- 14,357
------- ------- -------
21,843 -- 21,843
OTHER ASSETS
Other ............................................................ 6,949 -- 6,949
------- ------- -------
6,949 -- 6,949
$28,792 $ -- $28,792
<FN>
Note:
Cinergy Services has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY SERVICES, INC.
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 - $.05 par value;
Authorized shares - 50
Outstanding shares - 50 Actual ............................... $ -- $ -- $ --
Retained earnings ............................................ -- -- --
-------- ------- --------
Total common stock equity .................................... -- -- --
CURRENT LIABILITIES
Notes payable to affiliated
companies .................................................... 18,489 -- 18,489
Accounts payable ............................................. 10,963 -- 10,963
Accounts payable to affiliated
companies .................................................... 1,840 -- 1,840
Accrued taxes ................................................ (2,567) -- (2,567)
-------- ------- --------
28,725 -- 28,725
OTHER LIABILITIES
Deferred income taxes ........................................ 67 -- 67
-------- ------- --------
67 -- 67
$ 28,792 $ -- $ 28,792
<FN>
Note:
Cinergy Services has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY SERVICES, INC.
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 .................................... $(213) $-- $(213)
Net income ................................................... 213 -- 213
----- ---- -----
BALANCE DECEMBER 31, 1996 .................................... $-- $-- $--
<FN>
Note:
Cinergy Services has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
THE UNION LIGHT, HEAT, AND POWER COMPANY
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT, AND POWER COMPANY
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>
OPERATING REVENUES
Electric ......................................................... $ 190,900 $ -- $ 190,900
Gas .............................................................. 76,868 -- 76,868
--------- --------- ---------
Total operating revenues ......................................... 267,768 -- 267,768
OPERATING EXPENSES
Electricity purchased from parent company
for resale ....................................................... 143,839 -- 143,839
Gas purchased .................................................... 41,185 -- 41,185
Other operation .................................................. 30,934 -- 30,934
Maintenance ...................................................... 4,997 -- 4,997
Depreciation ..................................................... 11,909 -- 11,909
Income taxes ..................................................... 9,834 -- 9,834
Taxes other than income taxes .................................... 4,036 -- 4,036
--------- --------- ---------
246,734 -- 246,734
OPERATING INCOME ................................................. 21,034 -- 21,034
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction ..................................................... (8) -- (8)
Income taxes ..................................................... (352) 408 56
Other - net ...................................................... (1,417) -- (1,417)
--------- --------- ---------
(1,777) 408 (1,369)
INCOME BEFORE INTEREST ........................................... 19,257 408 19,665
INTEREST
Interest on long-term debt ....................................... 4,016 -- 4,016
Other interest ................................................... 703 1,167 1,870
Allowance for borrowed funds used
during construction .............................................. (58) -- (58)
--------- --------- ---------
4,661 1,167 5,828
NET INCOME ....................................................... $ 14,596 $ (759) $ 13,837
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT, AND POWER COMPANY
PRO FORMA 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 ............................................................... $195,053 $ -- $195,053
Gas .................................................................... 148,203 -- 148,203
Common ................................................................. 19,285 -- 19,285
-------- -------- --------
362,541 -- 362,541
Accumulated depreciation ............................................... 122,310 -- 122,310
-------- -------- --------
240,231 -- 240,231
Construction work in progress .......................................... 9,050 -- 9,050
-------- -------- --------
Total utility plant .................................................... 249,281 -- 249,281
CURRENT ASSETS
Cash and temporary cash investments .................................... 1,197 19,451 20,648
Notes receivable from affiliated companies ............................. 100 -- 100
Accounts receivable less accumulated
provision for doubtful accounts of $1,024 .............................. 12,763 -- 12,763
Accounts receivable from affiliated companies .......................... 620 -- 620
Materials, supplies, and fuel
- - at average cost
Gas stored for current use ............................................. 6,351 -- 6,351
Other materials and supplies ........................................... 716 -- 716
Property taxes applicable to subsequent year ........................... 2,600 -- 2,600
Prepayments and other .................................................. 370 -- 370
-------- -------- --------
24,717 19,451 44,168
OTHER ASSETS
Regulatory Assets
Deferred merger costs .................................................. 5,218 -- 5,218
Unamortized costs of reacquiring debt .................................. 3,764 -- 3,764
Other .................................................................. 2,357 -- 2,357
Other .................................................................. 5,146 -- 5,146
-------- -------- --------
16,485 -- 16,485
$290,483 $ 19,451 $309,934
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT, AND POWER COMPANY
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 - $15.00 par value;
Authorized shares - 1,000,000
Outstanding shares - 585,333 Actual ............................... $ 8,780 $ -- $ 8,780
Paid-in capital ................................................... 18,839 -- 18,839
Retained earnings ................................................. 92,484 (759) 91,725
-------- --------- --------
Total common stock equity ......................................... 120,103 (759) 119,344
LONG-TERM DEBT .................................................... 44,617 -- 44,617
-------- --------- --------
Total capitalization .............................................. 164,720 (759) 163,961
CURRENT LIABILITIES
Notes payable ..................................................... -- 19,451 19,451
Notes payable to affiliated companies ............................. 30,649 -- 30,649
Accounts payable .................................................. 12,018 -- 12,018
Accounts payable to affiliated companies .......................... 16,771 -- 16,771
Accrued taxes ..................................................... 1,014 (408) 606
Accrued interest .................................................. 1,284 1,167 2,451
Other ............................................................. 5,248 -- 5,248
-------- --------- --------
66,984 20,210 87,194
OTHER LIABILITIES
Deferred income taxes ............................................. 33,463 -- 33,463
Unamortized investment tax credits ................................ 4,797 -- 4,797
Accrued pension and other postretirement
benefit costs ..................................................... 12,983 -- 12,983
Income taxes refundable through rates ............................. 5,121 -- 5,121
Other ............................................................. 2,415 -- 2,415
-------- --------- --------
58,779 -- 58,779
$290,483 $ 19,451 $309,934
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT, AND POWER COMPANY
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 .................................. $ 82,863 $-- $ 82,863
Net income ................................................. 14,596 (759) 13,837
Dividends on common stock .................................. (4,975) -- (4,975)
-------- ----- --------
BALANCE DECEMBER 31, 1996 .................................. $ 92,484 $(759) $ 91,725
</TABLE>
<PAGE>
THE UNION LIGHT, HEAT, AND POWER COMPANY
Pro Forma Journal Entries to Give Effect to the Borrowing
of Up to $50,000,000 from Banks
Entry No. 1
Cash and temporary cash investments $19,451,000
Notes payable $19,451,000
To record the issuance of notes payable net of $30,549,000 of notes receivable
from affiliated companies and notes payable to affiliated companies as of
December 31, 1996.
Entry No. 2
Other interest $ 1,167,060
Accrued interest $ 1,167,060
To record interest on $19,451,000 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 408,471
Income taxes $ 408,471
To record the reduction in income taxes due to increased interest expense on
notes payable.
($1,167,060 at an assumed tax rate of 35%).
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
THE WEST HARRISON GAS AND ELECTRIC COMPANY
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
THE WEST HARRISON GAS AND ELECTRIC COMPANY
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>
ELECTRIC OPERATING REVENUES ....................................... $540 $-- $540
OPERATING EXPENSES
Fuel .............................................................. 1 -- 1
Purchased and exchanged power
Affiliated companies .............................................. 363 -- 363
Other operation ................................................... 55 -- 55
Maintenance ....................................................... 11 -- 11
Depreciation ...................................................... 19 -- 19
Income taxes ...................................................... 30 -- 30
Taxes other than income taxes ..................................... 12 -- 12
---- ----- ----
491 -- 491
OPERATING INCOME .................................................. 49 -- 49
OTHER INCOME AND EXPENSES - NET ................................... -- 4 4
---- ----- ----
INCOME BEFORE INTEREST ............................................ 49 4 53
INTEREST .......................................................... 3 12 15
---- ----- ----
NET INCOME ........................................................ $ 46 $ (8) $ 38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE WEST HARRISON GAS AND ELECTRIC COMPANY
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT - ORIGINAL COST
In service ................................................................ $585 $-- $585
Accumulated depreciation .................................................. 189 -- 189
---- ---- ----
Total electric utility plant .............................................. 396 -- 396
CURRENT ASSETS
Cash ...................................................................... 11 200 211
Accounts receivable ....................................................... 75 -- 75
Accounts receivable from affiliated companies ............................. 4 -- 4
Prepayments ............................................................... 8 -- 8
---- ---- ----
98 200 298
OTHER ASSETS
Amounts due from customers - income taxes ................................. 11 -- 11
Other ..................................................................... 9 -- 9
---- ---- ----
20 -- 20
$514 $200 $714
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE WEST HARRISON GAS AND ELECTRIC COMPANY
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 - $10.00 par value;
Authorized shares - 10,000
Outstanding shares - 2,000 Actual ....................................... $ 20 $-- $ 20
Retained earnings ....................................................... 297 (8) 289
---- ----- ----
Total capitalization .................................................... 317 (8) 309
CURRENT LIABILITIES
Notes payable ........................................................... -- 200 200
Accounts payable ........................................................ 28 -- 28
Accounts payable to affiliated companies ................................ 48 -- 48
Accrued taxes ........................................................... 8 (4) 4
Accrued interest ........................................................ 2 12 14
Other ................................................................... 8 -- 8
---- ----- ----
94 208 302
OTHER LIABILITIES
Deferred income taxes ................................................... 73 -- 73
Unamortized investment tax credits ...................................... 12 -- 12
Accrued pension and other postretirement
benefit costs ........................................................... 14 -- 14
Other ................................................................... 4 -- 4
---- ----- ----
103 -- 103
$514 $ 200 $714
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE WEST HARRISON GAS AND ELECTRIC COMPANY
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 .................................... $ 271 $-- $ 271
Net income ................................................... 46 (8) 38
Dividends on common stock .................................... (20) -- (20)
----- --- -----
BALANCE DECEMBER 31, 1996 .................................... $ 297 $(8) $ 289
</TABLE>
<PAGE>
THE WEST HARRISON GAS AND ELECTRIC COMPANY
Pro Forma Journal Entries to Give Effect to the Borrowing
of Up to $200,000 from Banks
Entry No. 1
Cash $200,000
Notes payable $200,000
To record the issuance of $200,000 of notes payable.
Entry No. 2
Interest $ 12,000
Accrued interest $ 12,000
To record interest on $200,000 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 4,200
Income taxes $ 4,200
To record the reduction in income taxes due to increased interest expense on
notes payable.
($12,000 at an assumed tax rate of 35%).
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
LAWRENCEBURG GAS COMPANY
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
LAWRENCEBURG GAS COMPANY
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>
OPERATING REVENUES .............................................. $ 7,633 $ -- $7,633
OPERATING EXPENSES
Gas purchased ................................................... 3,976 -- 3,976
Other operation ................................................. 1,229 -- 1,229
Maintenance ..................................................... 162 -- 162
Depreciation .................................................... 417 -- 417
Income taxes .................................................... 515 -- 515
Taxes other than income taxes ................................... 292 -- 292
------- ------- ------
6,591 -- 6,591
OPERATING INCOME ................................................ 1,042 -- 1,042
OTHER INCOME AND EXPENSES - NET ................................. (14) 33 19
------- ------- ------
INCOME BEFORE INTEREST .......................................... 1,028 33 1,061
INTEREST ........................................................ 191 94 285
------- ------- ------
NET INCOME ...................................................... $ 837 $ (61) $ 776
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LAWRENCEBURG GAS COMPANY
PRO FORMA 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 .......................................................... $14,570 $ -- $14,570
Accumulated depreciation ............................................ 4,026 -- 4,026
------- ------- -------
10,544 -- 10,544
Construction work in progress ....................................... 132 -- 132
------- ------- -------
Total utility plant ................................................. 10,676 -- 10,676
CURRENT ASSETS
Cash ................................................................ 153 1,567 1,720
Accounts receivable less accumulated
provision for doubtful accounts of $17,488 .......................... 1,843 -- 1,843
Gas stored for current use .......................................... 14 -- 14
Prepayments ......................................................... 12 -- 12
------- ------- -------
2,022 1,567 3,589
OTHER ASSETS
Unrecovered purchased gas cost ...................................... 919 -- 919
Other ............................................................... 249 -- 249
------- ------- -------
1,168 -- 1,168
$13,866 $ 1,567 $15,433
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LAWRENCEBURG GAS COMPANY
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 - without par value;
Authorized shares - 11,000
Outstanding shares - 10,768 Actual ................................ $ 539 $ -- $ 539
Retained earnings ................................................. 5,943 (61) 5,882
------- -------- -------
Total common stock equity ......................................... 6,482 (61) 6,421
LONG-TERM DEBT
9-3/4% Sereies due October 1, 2001 ................................ 1,200 -- 1,200
------- -------- -------
Total capitalization .............................................. 7,682 (61) 7,621
CURRENT LIABILITIES
Notes payable ..................................................... -- 1,567 1,567
Notes payable to affiliated companies ............................. 1,433 -- 1,433
Accounts payable .................................................. 998 -- 998
Accounts payable to affiliated companies .......................... 315 -- 315
Accrued taxes ..................................................... 315 (33) 282
Accrued interest .................................................. 33 94 127
Accrued employee benefits ......................................... 74 -- 74
Other ............................................................. 86 -- 86
------- -------- -------
3,254 1,628 4,882
OTHER LIABILITIES
Deferred income taxes ............................................. 1,513 -- 1,513
Unamortized investment tax credits ................................ 222 -- 222
Accrued pension and other postretirement
benefit costs ..................................................... 493 -- 493
Amounts due customers - income taxes .............................. 108 -- 108
Accrued environmental costs ....................................... 128 -- 128
Refunds from gas suppliers received ............................... 93 -- 93
Other ............................................................. 373 -- 373
------- -------- -------
2,930 -- 2,930
$13,866 $ 1,567 $15,433
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LAWRENCEBURG GAS COMPANY
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 ................................... $5,106 $-- $5,106
Net income .................................................. 837 (61) 776
------ ---- ------
BALANCE DECEMBER 31, 1996 ................................... $5,943 $(61) $5,882
</TABLE>
<PAGE>
LAWRENCEBURG GAS COMPANY
Pro Forma Journal Entries to Give Effect to the Borrowing
of Up to $3,000,000 from Banks
Entry No. 1
Cash $1,566,933
Notes payable $1,566,933
To record the issuance of notes payable net of $1,433,067 of notes payable to
affiliated companies.
Entry No. 2
Interest $ 94,016
Accrued interest $ 94,016
To record interest on $1,566,933 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 32,906
Income taxes $ 32,906
To record the reduction in income taxes due to increased interest expense on
notes payable.
($94,016 at an assumed tax rate of 35%).
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
KO TRANSMISSION COMPANY
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
KO TRANSMISSION COMPANY
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>
GAS OPERATING REVENUES ........................................... $573 $-- $573
OPERATING EXPENSES
Other operation .................................................. 274 -- 274
Depreciation ..................................................... 104 -- 104
Income taxes ..................................................... 68 -- 68
Taxes other than income taxes .................................... 25 -- 25
---- ---- ----
471 -- 471
OPERATING INCOME ................................................. 102 -- 102
OTHER INCOME AND EXPENSES - NET .................................. 2 -- 2
---- ---- ----
INCOME BEFORE INTEREST ........................................... 104 -- 104
INTEREST ......................................................... -- -- --
---- ---- ----
NET INCOME ....................................................... $104 $-- $104
<FN>
Note:
KO Transmission Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KO TRANSMISSION COMPANY
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
GAS UTILITY PLANT - ORIGINAL COST
In service ....................................................... $8,033 $ -- $8,033
Accumulatededepreciation ......................................... 6,850 -- 6,850
------ ------ ------
Total gas utility plant .......................................... 1,183 -- 1,183
CURRENT ASSETS
Accounts receivable .............................................. 18 -- 18
------ ------ ------
18 -- 18
OTHER ASSETS
Other ............................................................ 469 -- 469
------ ------ ------
469 -- 469
$1,670 $ -- $1,670
<FN>
Note:
KO Transmission Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KO TRANSMISSION COMPANY
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 - $.00 par value;
Authorized shares - ,000
Outstanding shares - ,000 Actual .................................... $ -- $ -- $ --
Paid-in capital ..................................................... 515 -- 515
Retained earnings ................................................... 29 -- 29
------- ------- -------
Total capitalization ................................................ 544 -- 544
CURRENT LIABILITIES
Accounts payable .................................................... 53 -- 53
Accounts payable to affiliated companies ............................ 1,038 -- 1,038
Accrued taxes ....................................................... 50 -- 50
------- ------- -------
1,141 -- 1,141
OTHER LIABILITIES
Deferred income taxes ............................................... (15) -- (15)
------- ------- -------
(15) -- (15)
$ 1,670 $ -- $ 1,670
<FN>
Note:
KO Transmission Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KO TRANSMISSION COMPANY
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 .................................. $-- $ -- $--
Net income ................................................. 104 -- 104
Dividends on common stock .................................. (75) -- (75)
----- ------ -----
BALANCE DECEMBER 31, 1996 .................................. $ 29 $ -- $ 29
<FN>
Note:
KO Transmission Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
TRI-STATE IMPROVEMENT COMPANY
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
TRI-STATE IMPROVEMENT COMPANY
PRO FORMA 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
Income taxes .................................................... $(205) $-- $(205)
Other - net ..................................................... 981 -- 981
----- ---- -----
776 -- 776
INCOME BEFORE INTEREST .......................................... 776 -- 776
INTEREST ........................................................ 401 -- 401
NET INCOME ...................................................... $ 375 $-- $ 375
<FN>
Note:
Tri-State Improvement Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRI-STATE IMPROVEMENT COMPANY
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996
ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
NONUTILITY PROPERTY - ORIGINAL COST
In service ....................................................... $31,727 $ -- $31,727
Accumulated depreciation ......................................... 256 -- 256
------- ------- -------
Total nonutility property ........................................ 31,471 -- 31,471
CURRENT ASSETS
Accounts receivable .............................................. 1,790 -- 1,790
Accounts receivable from affiliated
companies ........................................................ 956 -- 956
------- ------- -------
2,746 -- 2,746
OTHER ASSETS
Other ............................................................ 4 -- 4
------- ------- -------
4 -- 4
$34,221 $ -- $34,221
<FN>
Note:
Tri-State Improvement Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRI-STATE IMPROVEMENT COMPANY
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 - without par value; $25 stated value; Authorized shares - 1000;
Outstanding shares - 1000 Actual .......................................... $ 25 $ -- $ 25
Retained earnings ......................................................... 429 -- 429
------- ------- -------
Total common stock equity ................................................. 454 -- 454
Long-term Debt ............................................................ 29,691 -- 29,691
------- ------- -------
Total capitalization ...................................................... 30,145 -- 30,145
CURRENT LIABILITIES
Accounts payable .......................................................... 301 -- 301
Accrued taxes ............................................................. 710 -- 710
------- ------- -------
1,011 -- 1,011
OTHER LIABILITIES
Deferred income taxes ..................................................... 3,054 -- 3,054
Other ..................................................................... 11 -- 11
------- ------- -------
3,065 -- 3,065
$34,221 $ -- $34,221
<FN>
Note:
Tri-State Improvement Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRI-STATE IMPROVEMENT COMPANY
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 ...................................... $ 54 $ -- $ 54
Net income ..................................................... 375 -- 375
---- ----- ----
BALANCE DECEMBER 31, 1996 ...................................... $429 $ -- $429
<FN>
Note:
Tri-State Improvement Company has no pro forma journal entries relating to this proposed transaction.
</FN>
</TABLE>
FINANCIAL STATEMENTS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U-1
THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED
AS OF DECEMBER 31, 1996
(Unaudited)
Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
THE CINCINNATI GAS & ELECTRIC COMPANY
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>
OPERATING REVENUES
Electric
Non-affiliated companies ............................................ $ 1,458,828 $ -- $ 1,458,828
Affiliated companies ................................................ 43,180 -- 43,180
Gas
Non-affiliated companies ............................................ 474,034 -- 474,034
Affiliated companies ................................................ 7 -- 7
----------- ----------- -----------
Total operating revenues ............................................ 1,976,049 -- 1,976,049
OPERATING EXPENSES
Fuel used in electric production .................................... 349,197 -- 349,197
Gas purchased ....................................................... 249,116 -- 249,116
Purchased and exchanged power ....................................... -- --
Non-affiliated companies ............................................ 46,333 -- 46,333
Affiliated companies ................................................ 21,921 -- 21,921
Other operation ..................................................... 330,169 -- 330,169
Maintenance ......................................................... 96,205 -- 96,205
Depreciation ........................................................ 160,951 -- 160,951
Amortization of phase-in deferrals .................................. 13,598 -- 13,598
Amortization of post-in-service deferred operating
expenses ............................................................ 3,290 -- 3,290
Income taxes ........................................................ 145,075 -- 145,075
Taxes other than income taxes ....................................... 207,904 -- 207,904
----------- ----------- -----------
1,623,759 -- 1,623,759
OPERATING INCOME .................................................... 352,290 -- 352,290
OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction ........................................................ 1,225 -- 1,225
Phase-in deferred return ............................................ 8,372 -- 8,372
Income taxes ........................................................ 9,139 448 9,587
Other - net ......................................................... (21,296) -- (21,296)
----------- ----------- -----------
(2,560) 448 (2,112)
INCOME BEFORE INTEREST .............................................. 349,730 448 350,178
INTEREST
Interest on long-term debt .......................................... 123,616 -- 123,616
Other interest ...................................................... 2,793 1,279 4,072
Allowance for borrowed funds used
during construction ................................................. (3,859) -- (3,859)
----------- ----------- -----------
122,550 1,279 123,829
NET INCOME .......................................................... $ 227,180 $ (831) $ 226,349
PREFERRED DIVIDEND REQUIREMENT ...................................... 10,643 -- 10,643
COSTS OF REACQUISITION OF PREFERRED
STOCK ............................................................... 18,391 -- 18,391
----------- ----------- -----------
NET INCOME APPLICABLE TO COMMON STOCK ............................... $ 198,156 $ (831) $ 197,315
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CINCINNATI GAS & ELECTRIC COMPANY
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 ......................................................... $4,631,605 $ -- $4,631,605
Gas .............................................................. 713,829 -- 713,829
Common ........................................................... 185,255 -- 185,255
---------- ---------- ----------
5,530,689 -- 5,530,689
Accumulated depreciation ......................................... 1,868,579 -- 1,868,579
---------- ---------- ----------
3,662,110 -- 3,662,110
Construction work in progress .................................... 95,984 -- 95,984
---------- ---------- ----------
Total utility plant .............................................. 3,758,094 -- 3,758,094
CURRENT ASSETS
Cash and temporary cash investments .............................. 5,120 21,318 26,438
Restricted deposits .............................................. 1,171 -- 1,171
Notes receivable from affiliated companies ....................... 31,740 -- 31,740
Accounts receivable less accumulated
provision for doubtful accounts of $9,178 ........................ 117,912 -- 117,912
Accounts receivable from affiliated companies .................... 2,453 -- 2,453
Materials, supplies, and fuel
- - at average cost
Fuel for use in electric production .............................. 29,865 -- 29,865
Gas stored for current use ....................................... 32,951 -- 32,951
Other materials and supplies ..................................... 52,023 -- 52,023
Property taxes applicable to subsequent year ..................... 123,580 -- 123,580
Prepayments and other ............................................ 32,433 -- 32,433
---------- ---------- ----------
429,248 21,318 450,566
OTHER ASSETS
Regulatory Assets
Amounts due from customers - income taxes ........................ 344,126 -- 344,126
Post-in-service carrying costs and
deferred operating expenses ...................................... 141,492 -- 141,492
Phase-in deferred return and depreciation ........................ 95,163 -- 95,163
Deferred demand-side management costs ............................ 33,534 -- 33,534
Deferred merger costs ............................................ 17,709 -- 17,709
Unamortized costs of reacquiring debt ............................ 38,439 -- 38,439
Other ............................................................ 19,545 -- 19,545
Other ............................................................ 89,908 -- 89,908
---------- ---------- ----------
779,916 -- 779,916
$4,967,258 $ 21,318 $4,988,576
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CINCINNATI GAS & ELECTRIC COMPANY
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 - $8.50 par value;
Authorized shares - 120,000,000
Outstanding shares - 89,663,086 Actual ......................... $ 762,136 $ -- $ 762,136
Paid-in capital ................................................ 536,276 -- 536,276
Retained earnings .............................................. 247,403 (831) 246,572
---------- ----------- ----------
Total common stock equity ...................................... 1,545,815 (831) 1,544,984
CUMULATIVE PREFERRED STOCK
Not subject to mandatory redemption ............................ 21,146 -- 21,146
LONG-TERM DEBT ................................................. 1,565,108 -- 1,565,108
---------- ----------- ----------
Total capitalization ........................................... 3,132,069 (831) 3,131,238
CURRENT LIABILITIES
Long-term debt due within one year ............................. 130,000 -- 130,000
Notes payable .................................................. 30,488 21,318 51,806
Notes payable to affiliated companies .......................... 103 -- 103
Accounts payable ............................................... 166,064 -- 166,064
Accounts payable to affiliated companies ....................... 12,726 -- 12,726
Accrued taxes .................................................. 267,841 (448) 267,393
Accrued interest ............................................... 30,570 1,279 31,849
Other .......................................................... 32,191 -- 32,191
---------- ----------- ----------
669,983 22,149 692,132
OTHER LIABILITIES
Deferred income taxes .......................................... 767,085 -- 767,085
Unamortized investment tax credits ............................. 123,185 -- 123,185
Accrued pension and other postretirement
benefit costs .................................................. 165,282 -- 165,282
Other .......................................................... 109,654 -- 109,654
---------- ----------- ----------
1,165,206 -- 1,165,206
$4,967,258 $ 21,318 $4,988,576
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CINCINNATI GAS & ELECTRIC COMPANY
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 ......................................... $ 427,226 $-- $ 427,226
Net income ........................................................ 227,180 (831) 226,349
Dividends on preferred stock ...................................... (10,643) -- (10,643)
Dividends on common stock ......................................... (377,969) -- (377,969)
Costs of reacquisition of preferred stock ......................... (18,391) -- (18,391)
--------- ----- ---------
BALANCE DECEMBER 31, 1996 ......................................... $ 247,403 $(831) $ 246,572
</TABLE>
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
Pro Forma Consolidated Journal Entries to Give Effect to the Borrowing
of Up to $53,300,000 from Banks
Entry No. 1
Cash and temporary cash investments $21,317,933
Notes payable $21,317,933
To record the issuance of notes payable of The Union Light, Heat, and Power
Company, The West Harrison Gas and Electric Company, Lawrenceburg Gas Company,
and Miami Power Corporation net of $31,982,067 of notes receivable from
affiliated companies and all notes payable as of December 31, 1996.
Entry No. 2
Other interest $ 1,279,076
Accrued interest $ 1,279,076
To record interest on $21,317,933 of notes payable at 6% per annum.
Entry No. 3
Accrued taxes $ 447,677
Income taxes $ 447,677
To record the reduction in income taxes due to increased interest expense on
notes payable.
($1,279,076 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 $ (10,179) $ 337,377
Income taxes ........................................................ 6,857 -- 6,857
Other - net ......................................................... (1,501) -- (1,501)
--------- --------- ---------
352,912 (10,179) 342,733
INCOME BEFORE INTEREST .............................................. 352,912 (10,179) 342,733
INTEREST ............................................................ 18,115 -- 18,115
NET INCOME .......................................................... $ 334,797 $ (10,179) $ 324,618
</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 .................................................. 1,000 -- 1,000
----------- ----------- ----------
15,531 -- 15,531
OTHER ASSETS
Investment in consolidated subsidiaries ...................... 3,101,501 (10,179) 3,091,322
Other ........................................................ 2,071 -- 2,071
----------- ----------- ----------
3,103,572 (10,179) 3,093,393
$ 3,119,103 $ (10,179) $3,108,924
</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 (10,179) 982,094
Cumulative foreign currency translation
adjustment ................................................. (131) -- (131)
----------- ----------- -----------
Total common stock equity .................................. 2,584,454 (10,179) 2,574,275
CURRENT LIABILITIES
Notes payable .............................................. 509,000 -- 509,000
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) -- (14,439)
Accrued interest ........................................... 975 -- 975
----------- ----------- -----------
521,336 -- 521,336
OTHER LIABILITIES
Deferred income taxes ...................................... 13,287 -- 13,287
Other ...................................................... 26 -- 26
----------- ----------- -----------
13,313 -- 13,313
$ 3,119,103 $ (10,179) $ 3,108,924
</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 (10,179) 324,618
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 $(10,179) $ 982,094
</TABLE>
<PAGE>
CINERGY CORP.
Pro Forma Journal Entries to Give Effect to the Various Cinergy System
Companies' Pro Forma Journal Entries Involving Interest and Income Tax Expense
from the Borrowing of Up to $453,300,000 from Banks on Cinergy Corp.
Entry No. 1
Equity in earnings of subsidiaries $10,179,231
Investment in subsidiaries $10,179,231
To record the net effect of the various Cinergy sytem companies' pro forma
journal entries involving interest and income tax expense on Cinergy
Corporation.
<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> 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> 15531 15531
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 3103572 3093393
<TOTAL-ASSETS> 3119103 3108924
<COMMON> 1577 1577
<CAPITAL-SURPLUS-PAID-IN> 1590735 1590735
<RETAINED-EARNINGS> 992142 981963
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2584454 2574275
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 509007 509007
<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> 25642 25642
<TOT-CAPITALIZATION-AND-LIAB> 3119103 3108924
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (6857) (6857)
<OTHER-OPERATING-EXPENSES> (346055) (335876)
<TOTAL-OPERATING-EXPENSES> (352912) (342733)
<OPERATING-INCOME-LOSS> 352912 342733
<OTHER-INCOME-NET> 0 0
<INCOME-BEFORE-INTEREST-EXPEN> 352912 342733
<TOTAL-INTEREST-EXPENSE> 18115 18115
<NET-INCOME> 334797 324618
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 316406 306227
<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>
<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> 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> 6289626 6289626
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 566011 827017
<TOTAL-DEFERRED-CHARGES> 1168666 1168666
<OTHER-ASSETS> 824211 824211
<TOTAL-ASSETS> 8848514 9109520
<COMMON> 1577 1577
<CAPITAL-SURPLUS-PAID-IN> 1590735 1590735
<RETAINED-EARNINGS> 992142 981963
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2584454 2574275
0 0
194232 194232
<LONG-TERM-DEBT-NET> 2534978 2534978
<SHORT-TERM-NOTES> 713617 974623
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 140000 140000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2681233 2691412
<TOT-CAPITALIZATION-AND-LIAB> 8848514 9109520
<GROSS-OPERATING-REVENUE> 3242740 3242740
<INCOME-TAX-EXPENSE> 218269 218269
<OTHER-OPERATING-EXPENSES> 2466213 2466213
<TOTAL-OPERATING-EXPENSES> 2684482 2684482
<OPERATING-INCOME-LOSS> 558258 558258
<OTHER-INCOME-NET> 15322 20803
<INCOME-BEFORE-INTEREST-EXPEN> 573580 579061
<TOTAL-INTEREST-EXPENSE> 215603 231263
<NET-INCOME> 357977 347798
23180 23180
<EARNINGS-AVAILABLE-FOR-COMM> 316406 306227
<COMMON-STOCK-DIVIDENDS> 274358 274358
<TOTAL-INTEREST-ON-BONDS> 190617 190617
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 2.00 1.94
<EPS-DILUTED> 2.00 1.94
</TABLE>
<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> 2
<NAME> CINERGY SERVICES, INC.
<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> 21843 21843
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 6949 6949
<TOTAL-ASSETS> 28792 28792
<COMMON> 0 0
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 0 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 0 0
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 18489 18489
<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> 10303 10303
<TOT-CAPITALIZATION-AND-LIAB> 28792 28792
<GROSS-OPERATING-REVENUE> 615348 615348
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 614473 614473
<TOTAL-OPERATING-EXPENSES> 614473 614473
<OPERATING-INCOME-LOSS> 875 875
<OTHER-INCOME-NET> (93) (93)
<INCOME-BEFORE-INTEREST-EXPEN> 782 782
<TOTAL-INTEREST-EXPENSE> 569 569
<NET-INCOME> 213 213
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 213 213
<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>
<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> 5
<NAME> THE CINCINNATI GAS & ELECTRIC CO. (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> 3758094 3758094
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 429248 450566
<TOTAL-DEFERRED-CHARGES> 690008 690008
<OTHER-ASSETS> 89908 89908
<TOTAL-ASSETS> 4967258 4988576
<COMMON> 762136 762136
<CAPITAL-SURPLUS-PAID-IN> 536276 536276
<RETAINED-EARNINGS> 247403 246572
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1545815 1544984
0 0
21146 21146
<LONG-TERM-DEBT-NET> 1565108 1565108
<SHORT-TERM-NOTES> 30591 51909
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 130000 130000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1674598 1675429
<TOT-CAPITALIZATION-AND-LIAB> 4967258 4988576
<GROSS-OPERATING-REVENUE> 1976049 1976049
<INCOME-TAX-EXPENSE> 145075 145075
<OTHER-OPERATING-EXPENSES> 1478684 1478684
<TOTAL-OPERATING-EXPENSES> 1623759 1623759
<OPERATING-INCOME-LOSS> 352290 352290
<OTHER-INCOME-NET> (2560) (2112)
<INCOME-BEFORE-INTEREST-EXPEN> 349730 350178
<TOTAL-INTEREST-EXPENSE> 122550 123829
<NET-INCOME> 227180 226349
10643 10643
<EARNINGS-AVAILABLE-FOR-COMM> 198146 197315
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 123616 123616
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
<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> 7
<NAME> THE UNION LIGHT, HEAT AND POWER CO.
<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> 249281 249281
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 24717 44168
<TOTAL-DEFERRED-CHARGES> 11339 11339
<OTHER-ASSETS> 5146 5146
<TOTAL-ASSETS> 290483 309934
<COMMON> 8780 8780
<CAPITAL-SURPLUS-PAID-IN> 18839 18839
<RETAINED-EARNINGS> 92484 91725
<TOTAL-COMMON-STOCKHOLDERS-EQ> 120103 119344
0 0
0 0
<LONG-TERM-DEBT-NET> 44617 44617
<SHORT-TERM-NOTES> 30649 50100
<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> 95114 95873
<TOT-CAPITALIZATION-AND-LIAB> 290483 309934
<GROSS-OPERATING-REVENUE> 267768 267768
<INCOME-TAX-EXPENSE> 9834 9834
<OTHER-OPERATING-EXPENSES> 236900 236900
<TOTAL-OPERATING-EXPENSES> 246734 246734
<OPERATING-INCOME-LOSS> 21034 21034
<OTHER-INCOME-NET> (1777) (1369)
<INCOME-BEFORE-INTEREST-EXPEN> 19257 19665
<TOTAL-INTEREST-EXPENSE> 4661 5828
<NET-INCOME> 14596 13837
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 14596 13837
<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>
<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> 8
<NAME> THE WEST HARRISON GAS AND ELECTRIC CO.
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1996
<PERIOD-START> JAN-01-1994 JAN-01-1996
<PERIOD-END> DEC-31-1994 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 396 396
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 98 298
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 20 20
<TOTAL-ASSETS> 514 714
<COMMON> 20 20
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 297 289
<TOTAL-COMMON-STOCKHOLDERS-EQ> 317 309
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 200
<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> 197 205
<TOT-CAPITALIZATION-AND-LIAB> 514 714
<GROSS-OPERATING-REVENUE> 540 540
<INCOME-TAX-EXPENSE> 30 30
<OTHER-OPERATING-EXPENSES> 461 461
<TOTAL-OPERATING-EXPENSES> 491 491
<OPERATING-INCOME-LOSS> 49 49
<OTHER-INCOME-NET> 0 4
<INCOME-BEFORE-INTEREST-EXPEN> 49 53
<TOTAL-INTEREST-EXPENSE> 3 15
<NET-INCOME> 46 38
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 46 38
<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>
<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> 9
<NAME> LAWRENCEBURG GAS CO.
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1996
<PERIOD-START> JAN-01-1994 JAN-01-1996
<PERIOD-END> DEC-31-1994 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 10676 10676
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 2022 3589
<TOTAL-DEFERRED-CHARGES> 919 919
<OTHER-ASSETS> 249 249
<TOTAL-ASSETS> 13866 15433
<COMMON> 539 539
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 5943 5882
<TOTAL-COMMON-STOCKHOLDERS-EQ> 6482 6421
0 0
0 0
<LONG-TERM-DEBT-NET> 1200 1200
<SHORT-TERM-NOTES> 1433 3000
<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> 4751 4812
<TOT-CAPITALIZATION-AND-LIAB> 13866 15433
<GROSS-OPERATING-REVENUE> 7633 7633
<INCOME-TAX-EXPENSE> 515 515
<OTHER-OPERATING-EXPENSES> 6076 6076
<TOTAL-OPERATING-EXPENSES> 6591 6591
<OPERATING-INCOME-LOSS> 1042 1042
<OTHER-INCOME-NET> (14) 19
<INCOME-BEFORE-INTEREST-EXPEN> 1028 1061
<TOTAL-INTEREST-EXPENSE> 191 285
<NET-INCOME> 837 776
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 837 776
<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>
<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> 10
<NAME> MIAMI POWER CORP.
<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> 9 9
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 68 168
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 77 177
<COMMON> 1 1
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> (6) (10)
<TOTAL-COMMON-STOCKHOLDERS-EQ> (5) (9)
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 100
<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> 82 86
<TOT-CAPITALIZATION-AND-LIAB> 77 177
<GROSS-OPERATING-REVENUE> 39 39
<INCOME-TAX-EXPENSE> 6 6
<OTHER-OPERATING-EXPENSES> 24 24
<TOTAL-OPERATING-EXPENSES> 30 30
<OPERATING-INCOME-LOSS> 9 9
<OTHER-INCOME-NET> 0 2
<INCOME-BEFORE-INTEREST-EXPEN> 9 11
<TOTAL-INTEREST-EXPENSE> 0 6
<NET-INCOME> 9 5
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 9 5
<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>
<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> 12
<NAME> TRI-STATE IMPROVEMENT CO.
<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> 31471 31471
<TOTAL-CURRENT-ASSETS> 2746 2746
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 4 4
<TOTAL-ASSETS> 34221 34221
<COMMON> 25 25
<CAPITAL-SURPLUS-PAID-IN> 0 0
<RETAINED-EARNINGS> 429 429
<TOTAL-COMMON-STOCKHOLDERS-EQ> 454 454
0 0
0 0
<LONG-TERM-DEBT-NET> 29691 29691
<SHORT-TERM-NOTES> 0 0
<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> 4076 4076
<TOT-CAPITALIZATION-AND-LIAB> 34221 34221
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 0 0
<TOTAL-OPERATING-EXPENSES> 0 0
<OPERATING-INCOME-LOSS> 0 0
<OTHER-INCOME-NET> 776 776
<INCOME-BEFORE-INTEREST-EXPEN> 776 776
<TOTAL-INTEREST-EXPENSE> 401 401
<NET-INCOME> 375 375
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 375 375
<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>
<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> 11
<NAME> KO TRANSMISSION CO.
<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> 1183 1183
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 18 18
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 469 469
<TOTAL-ASSETS> 1670 1670
<COMMON> 0 0
<CAPITAL-SURPLUS-PAID-IN> 515 515
<RETAINED-EARNINGS> 29 29
<TOTAL-COMMON-STOCKHOLDERS-EQ> 544 544
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<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> 1126 1126
<TOT-CAPITALIZATION-AND-LIAB> 1670 1670
<GROSS-OPERATING-REVENUE> 573 573
<INCOME-TAX-EXPENSE> 68 68
<OTHER-OPERATING-EXPENSES> 403 403
<TOTAL-OPERATING-EXPENSES> 471 471
<OPERATING-INCOME-LOSS> 102 102
<OTHER-INCOME-NET> 2 2
<INCOME-BEFORE-INTEREST-EXPEN> 104 104
<TOTAL-INTEREST-EXPENSE> 0 0
<NET-INCOME> 104 104
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 104 104
<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>
