File No. 70-8427
SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET, N.W.
WASHINGTON, D. C. 20549
__________________________________________
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company filing this statement
and address of principal executive offices)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Vice President and Treasurer
Cinergy Corp.
(address above)
(Name and address of agent of service)
Applicant requests that the Commission send copies of all notices, orders
and communications in connection herewith to:
Jerome A. Vennemann William T. Baker, Jr.
Associate General Counsel Thelen Reid & Priest LLP
Cinergy Corp. 40 West 57th Street
(address above) New York, New York 10019
The Application-Declaration in this proceeding, as previously amended by
Post-Effective Amendments Nos. 1, 2 and 3, filed on October 17, 1997,
February 6, 1998, and July 21, 1998, respectively (as so amended, the
"Application") is further amended solely to the extent provided below.
1. The third and fourth paragraphs of Item 1.A, "Requested
Authorization," are restated in their entirety to read as set forth
below; the fifth paragraph of Item 1.A is deleted.
Prior to the three-year expiration date, Cinergy
submitted a filing addressing the retainability of the
remaining nonutility properties and requesting a one-year
extension in the pending reservation of jurisdiction over
the gas properties.
Cinergy now supersedes that earlier filing with the
instant filing. In this filing, Cinergy requests a release of
the jurisdiction reserved in the Merger Order and authority
to retain the gas properties of CG&E. Pending completion
of the record, Cinergy requests that the Commission continue
to reserve jurisdiction over the remaining nonutility interests
(as described in Item 1.C.1).
2. Item 1.C.1 ("1994 Nonutility Interests of CG&E and PSI/Requested
Action") is amended by deleting the third paragraph thereof
(which begins with the clause, "In addition, with regard to the
limited partnership investments in Blue Chip Opportunity Fund,L.P.
and CID Equity Capital III,L.P.,") in its entirety.
3. Item 1.C. 3.g ("Status of 1994 Nonutility Interests/CG&E
Nonutility Interests: Good Citizen' Limited Partnership
Investments") is amended by deleting the fourth paragraph thereof
and restating the fifth paragraph so that it reads in its entirety as
follows:
Any further investments by CG&E or any associate company in any
of the funds described above would only be made pursuant to a
separate order or orders from the Commission or as permitted by
rule 40(a)(5).
4. Item 1.C.3.t ("Status of 1994 Nonutility Interests/PSI Nonutility
Interests: Good Citizen' Limited Partnership Investments") is
amended by deleting the eighth paragraph thereof and restating the
ninth paragraph so that it reads in its entirety as follows:
Any further investments by PSI or any associate company in any
of the funds described above would only be made pursuant to a
separate order or orders from the Commission or as permitted by
rule 40(a)(5).
5. Item 1.D, "Rule 54 Analysis," is restated in its entirety to read
as follows:
Rule 54 provides that 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 FUCO, or other
transactions by such registered holding company or its
subsidiaries other than with respect to EWGs or FUCOs, the
Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or a FUCO upon the
registered holding company system if the conditions of
rule 53(a), (b) and (c) are satisfied.
Cinergy currently does not meet the conditions of rule 53(a). At
March 31, 1998, Cinergy's "aggregate investment," as defined in
rule 53(a)(1), in EWGs and FUCOs was approximately $546 million.
This amount equals approximately 56% of Cinergy's "consolidated
retained earnings," also as defined in rule 53(a)(1)
(approximately $977 million), which exceeds the 50% "safe harbor"
limitation contained in rule 53(a). By order dated March 23,
1998 (HCAR No. 26848) ("100% Order"), t he Commission authorized
Cinergy to increase its total investments in EWGs and FUCOs to
100% of consolidated retained earnings. Accordingly, although
Cinergy's aggregate investment exceeds the 50% safe harbor, such
additional level of investment is expressly permitted under the
100% Order.
At September 30, 1997, the most recent period for which financial
statement information was evaluated in the 100% Order, Cinergy's
consolidated capitalization consisted of 44.1% equity and 55.9%
debt; at such date, Cinergy's pro forma consolidated
capitalization, taking into account the entire amount of
non-recourse debt allocable to Cinergy's ownership interest in
EWGs and FUCOs (i.e., $949 million) was 38.2% equity and 61.8%
debt. As shown in Item J filed herewith, Cinergy's pro forma
consolidated capitalization at March 31, 1998 consisted of 44%
equity and 56% debt; also as shown in Exhibit J, even
if the entire amount of non-recourse debt allocable to Cinergy's
ownership interest in EWGs and FUCOs were consolidated (i.e.,
$1.2 billion), equity would still comprise 36.9% of the overall
capital structure. The proposed transactions would have no
effect on the foregoing capitalization ratios.
With respect to earnings, the 100% Order stated that Cinergy did
not report a full-year op era ting loss attributable to its
investments in EWGs and FUCOs for any year 1992 through 1996.
That order also stated that Midlands Electricity plc
("Midlands"), a FUCO in the United Kingdom in which Cinergy has a
50% ownership interest, recorded a one-time extraordinary charge
in the third quarter of 1997 as a result of a windfall profits
tax imposed by the authorities in the United Kingdom, of which
$109 million was allocable to Cinergy. However, the 100% Order
noted that Midland's credit ratings by Standard and Poor's
remained unchanged following the charge. Since the date of the
100% Order, Cinergy's investments in EWGs and FUCOs have
continued to make a positive contribution to Cinergy's earnings.
With respect to the remaining conditions of rule 54, Cinergy has
complied and will continue to comply with the record-keeping
requirements of rule 53(a)(2), the limitation under rule 53(a)(3)
on the use of operating company personnel in rendering services
to EWGs and FUCOs, and the requirements of rule 53(a)(4)
concerning submission of specified filings under the Act to
retail rate regulatory agencies. In addition, none of the
conditions in rule 53(b) has occurred.
6. The existing text under Item 4 ("Regulatory Approval") is deleted
in its entirety and replaced by the following:
No state or federal regulatory agency other than the Commission
under the Act has jurisdiction over the proposed transactions,
except as noted in the Merger Order.
7. The following exhibit is filed herewith: Exhibit J/Pro Forma
Capitalization at March 31, 1998.<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned company
has duly caused this statement to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 30, 1998
CINERGY CORP.
By: /s/ Jerome A. Vennemann
Assistant Secretary
ENDNOTES
/1/ See quarterly rule 24 certificates filed in File No. 70-9011.
<PAGE>
EXHIBIT J
File No. 70-8427
CINERGY CORP. CONSOLIDATED
CAPITALIZATION ACTUAL
MARCH 31, 1998
$ Millions Percentage
Common Stock Equity
Common stock $ 2
Paid-in capital 1,574
Retained earnings 1,002
Accumulated other comprehensive income (3)
Total common stock equity 2,575 42.5%
Cumulative Preferred Stock of Subsidiaries
Not subject to mandatory redemption 93 1.5%
Long-term Debt 2,032 33.5%
Current Liabilities
Long-term debt due within one year 145
Notes payable and other short-term
obligations 1,223
Total current liabilities 1,368 22.5%
Total capitalization $ 6,068 100.0%
The following table sets forth Cinergy's pro forma capitalization, assuming
that the entire amount of non-recourse debt applicable to EWGs and FUCOs
which is attributable to Cinergy's ownership interest ($1.2 billion) is
consolidated. It should be noted that such consolidation is inconsistent
with the requirements of GAAP, and is being provided to the staff of the
Securities and Exchange Commission solely at its request.
CINERGY CORP. CONSOLIDATED
CAPITALIZATION
PRO FORMA
MARCH 31, 1998
$ Millions Percentage
Common Stock Equity
Common stock $ 2
Paid-in capital 1,574
Retained earnings 1,002
Accumulated other comprehensive income (3)
Total common stock equity 2,575 35.6%
Cumulative Preferred Stock of Subsidiaries
Not subject to mandatory redemption 93 1.3%
Long-term Debt 3,015 41.7%
Current Liabilities
Long-term debt due within one year 147
Notes payable and other short-term
obligations 1,404
Total current liabilities 1,551 21.4%
Total capitalization $7,234 100.0%
