SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1998
Cinergy Corp.
(Exact name of registrant as specified in its charter)
Delaware 1-11377 31-1385023
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
139 East Fourth Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 381-2000
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ITEM 5. OTHER EVENTS.
Reference is made to the press release of Cinergy Corp., dated July 14, 1998,
announcing charges against second quarter 1998 earnings, which is attached
hereto as Exhibit 99 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) The following exhibit is filed herewith:
Exhibit
Designation Nature of Exhibit
99 Press release of Cinergy Corp., dated July 14,
1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cinergy Corp.
(Registrant)
Date: July 15, 1998 By: /s/ John P. Steffen
-----------------------------
John P. Steffen,
Vice President and Comptroller
(Signature)
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Exhibit 99
News contact: Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Investor contact: Felicia Ferguson 513-287-4348
FOR IMMEDIATE RELEASE - JULY 14, 1998
CINERGY ANNOUNCES SECOND QUARTER CHARGES
CINCINNATI -- Cinergy Corp. (NYSE:CIN) announced today that it will take a
one-time charge against second quarter earnings of $80 million ($50 million
after tax), or $.32 per share, reflecting implementation of a 1989 settlement of
a dispute with the Wabash Valley Power Association.
The dispute with WVPA resulted from the cancellation of the Marble Hill nuclear
power station in 1984. The company has assumed WVPA's liability to Rural
Utilities Service and the Cooperative Finance Corporation and will repay the
obligation with interest over a 35-year term. Cinergy will use the net proceeds
from a 35-year power sales agreement with WVPA to fund the principal and
interest on the obligation.
The company also announced that it will provide additional reserves of $65
million ($41 million after tax), or $.26 per share, in the second quarter for
its electric trading business. These additional reserves reflect the results of
the company's reassessment of the basis upon which it provides reserves,
including those for credit exposure, on its existing contracts.
Cinergy expects no realized loss from its trading operations in the second
quarter, despite dramatic swings in the electricity market, caused by
unseasonably hot weather in June, scheduled and unplanned generating unit
outages in the region and defaults by several power marketers on their supply
obligations. The company considered the effects of these events in estimating
the value of its existing contract positions.
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Page 2. Cinergy announces second quarter charges
"Implementation of the WVPA settlement has been delayed for nine years," said
James E. Rogers, vice chairman, president and chief executive officer of
Cinergy. "We are pleased to have finally resolved substantially all the issues
related to this settlement in a manner favorable to the company while putting
this case behind us."
Regarding electric trading, Rogers said, "We have determined that the
unprecedented volatility in the market in June did not cause the company
substantial harm, and we remain committed to being a long-term market
participant. While we intend to aggressively manage our trading portfolio to
maximize its value, we believe it is appropriate to provide the additional
reserves at this time."
The company will file an 8-K with the Securities and Exchange Commission. It
expects to announce second quarter earnings on July 23, 1998.
Cinergy Corp. is one of the nation's leading diversified energy companies. Its
operating companies, The Cincinnati Gas & Electric Company and PSI Energy, Inc.,
serve more than 1.4 million electric customers and 455,000 gas customers in
Indiana, Ohio and Kentucky. The company also owns a 50 percent interest in
Midlands Electricity plc, a regional electric company in the United Kingdom
serving 2.2 million customers.
